Karachi, December 18, 2023 – The Federal Board of Revenue (FBR) has taken a significant step towards enhancing transparency and efficiency in the tax system by issuing a set of required supportive documents for sales tax refunds during the tax year 2024.
The updated Sales Tax Rules, 2006, now include Rule 38, which outlines the essential documents necessary for claiming sales tax refunds.
Supportive Documents Required: Rule 38
Rule 38 delineates the supportive documents that claimants must provide when seeking sales tax refunds, particularly through the Sales Tax Automated Refund Repository (STARR) channel. The officer-in-charge may request any or all of the following documents, depending on the nature of the refund claim:
1. Input Tax Invoices or Goods Declaration for Import:
• Claimants must furnish input tax invoices or, in the case of imports, goods declarations related to the goods for which a refund is being claimed.
2. Output Tax Invoices and Summary for Local Zero-Rated Goods:
• For local zero-rated goods, claimants should submit output tax invoices along with a summary of invoices.
3. Goods Declaration for Export:
• In the case of export-related refund claims, a goods declaration for export must be provided.
4. Verification Documents for Goods Exported:
• Copies of the House and Master bill of lading, airway bill, or railway receipt are required to verify the goods taken out of Pakistan.
5. Any Other Necessary Statements:
• Claimants may need to submit any additional statements deemed necessary for the processing of the refund claim.
Additional Requirements for Commercial Exporters: Rule 38(2)
Commercial exporters are subject to additional requirements beyond those outlined in Rule 38(1). In addition to the documents specified in sub-rule (1), commercial exporters must submit:
• Bank Credit Advice:
• A Bank credit advice issued by the concerned Bank.
• Copy of Duty Drawback Order:
• If issued by Customs Authorities, a copy of the duty drawback order must be provided.
Requirements for Refund Claims under Section 66: Rule 38(3)-(4)
For refund claims filed under section 66 of the Sales Tax Act, claimants must submit an application indicating their name, address, National Tax Number, the amount of sales tax refund claimed, and reasons for seeking the refund. The supporting documents include:
• Input Tax Invoices:
• Invoices related to the goods for which the refund is claimed.
• Proof of Payment of Input Tax:
• Evidence of payment of input tax claimed as a refund.
• Copy of Relevant Order:
• A copy of the relevant order on the basis of which the refund is claimed.
Special Cases: Rule 38(5)
In the case of claims by diplomats, diplomatic missions, and privileged persons and organizations, the following documents are required:
• Original Exemption Order or Certificate:
• Original exemption order or certificate as referred to in Chapter 4 VIII.
• Original Sales Tax Invoice:
• Original sales tax invoice.
The refund for diplomats and privileged entities will be sanctioned after making necessary endorsements on these documents to indicate that the refund has been paid against the same.
This move by the FBR aims to streamline the sales tax refund process, ensure the authenticity of claims, and ultimately contribute to a more accountable and efficient tax system in Pakistan. Claimants are advised to familiarize themselves with the updated rules to facilitate a smooth refund application process in the upcoming tax year.
