FBR sets up cell to probe bogus refund claims

ISLAMABAD: Federal Board of Revenue (FBR) has established a cell to probe fake refund claims in order to make system transparent.

In an official order issued on Thursday, the FBR said that to streamline the payment of refund claims and to initiate enforcement measures to minimize the risk of inadmissible refund claims, a system based Post Refund Analysis Cell (PRAC) had been established at FBR headquarter.

The cell has been established to ensure validity and appropriateness of refunds sanctioned through FASTER and ERS systems.

The FBR said since refund processing system has been programmed in auto-mode without human involvement, PRAC has been aimed at bringing transparency and further clarity in automated refund system by restricting the inadmissible claims centrally at the national level.

PRAC will work as per set SOPs/mandate to thoroughly scrutinize issues pertaining to inadmissible/excess/not warranted refunds.

Functions of PRAC shall include:

(i) To identify the cases of inadmissible refunds; and

(ii) To analyze the cases of inadmissible/excess refund claims and in particular, cases where there are suspicions of; (a) refund claimed on the strength of fake/flying invoices; (b) refund claimed on inadmissible inputs including building materials, paints wires and cables, vehicles and other such items which are restricted under the provisions of Section 8 of the Sales Tax Act, 1990; (c) falsification of documents with the intent to deliberately disguise the nature of transactions; (d) collusion amongst taxpayers to avail the bogus refunds.

The FBR said that where a fiscal investigation is required, the matter will be referred to the concerned LTO/CTO/MTO/RTO as the case may be with a report from PRAC.

The concerned field officers will be responsible to thoroughly scrutinize the observations including any other observation which in the opinion of the concerned officers is deemed necessary to ascertain the genuineness of the claim.

However, the officer posted in the cell will:

(a) Arrange and elaborate the facts indicating the commission of offence/crime’

(b) Chronology of events, primary and secondary evidences to establish the offence;

(c) List of documentary evidences including the positions, submissions to prove the offence; and

(d) Any other facts or evidence to establish the offence.

The officers posted in PRAC after completion of the analysis would submit the report regarding the assigned matters to Chief (IR-Analysis) at the earliest or within the time stipulated who will forward the said report to concerned field offices after the approval of the Member – IR Operations.

The PRAC has started its function from October 01, 2020.

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