Importers in Pakistan often pay excess sales tax at the clearance stage due to errors, incorrect valuation, or subsequent relief granted by appellate authorities. To address this, the Sales Tax Rules, 2006 (updated for Tax Year 2026) provide a clear mechanism for claiming import-related sales tax refunds under Rule 34A.
🔹 When Is an Import Sales Tax Refund Allowed?
An importer may claim a refund of sales tax paid in excess if it arises due to:
• Inadvertence, error, or misconception at the time of clearance
• Incorrect application of sales tax rate or valuation
• Relief granted by a competent adjudicating or appellate authority
⏰ Time Limit:
The refund claim must be filed within the period prescribed under Section 66 of the Sales Tax Act.
🏛 Authority Responsible for Refund Processing
Under Rule 34A(1):
• Refund claims are decided by the concerned Customs officer, not below the rank of Assistant Collector
• Claims are subject to procedural compliance under Rule 34A
📌 Refund Procedure for Registered Importers
Step-by-Step Process
📝 Step 1: File Refund Application with Customs
The registered importer files a refund claim with the concerned Customs Collectorate.
📤 Step 2: Endorsement to RTO/LTO
A copy of the refund application must be endorsed to the Refund Division of the relevant RTO or LTO.
🚫 Important:
Customs will not process the refund unless confirmation is received from Inland Revenue that:
• No adjustment has been made, and
• No refund has already been paid against the claimed amount
⏳ The RTO/LTO must respond within 30 days of receiving the reference.
👤 Refund Procedure for Unregistered Importers
For unregistered importers:
• The refund is processed directly by the Customs Collectorate
• No prior reference to RTO or LTO is required
This significantly simplifies the process for occasional or one-time importers.
📂 Post-Sanction Documentation & System Entry
🧾 After Refund Sanction by Customs
Once the Refund Payment Order (RPO) is issued by the Customs officer:
• Refund files are forwarded:
o To the concerned RTO/LTO (registered importers), or
o To the nearest RTO (unregistered importers)
• The sanction order must clearly mention:
o RTO/LTO confirmation number and date (if applicable)
💻 Generation of RPO & Payment
Upon receipt of sanction order:
1. The RTO/LTO officer-in-charge enters details into the computerized system
2. Approval is obtained from the Commissioner Inland Revenue
3. Electronic RPO is generated and transmitted to CSTRO
4. Refund amount is debited from sales tax on imports head
⚠ Key Compliance Tips for Importers
✔ File refund claims within statutory time limits
✔ Ensure refund amount is not adjusted elsewhere
✔ Maintain complete customs clearance and adjudication records
✔ Registered importers must coordinate with RTO/LTO Refund Division
🎯 Key Takeaway
For Tax Year 2026, import-related sales tax refunds:
• Are processed primarily by Customs authorities
• Require Inland Revenue confirmation for registered importers
• Follow a hybrid Customs–Inland Revenue workflow to avoid double refunds
Disclaimer: This article is provided for general informational purposes only and does not constitute legal or tax advice. The application of Sales Tax Rules, 2006 (as updated for Tax Year 2026) may vary based on individual facts, official notifications, and departmental practice. Importers are advised to consult the relevant law, FBR instructions, or a qualified tax professional before filing any sales tax refund claim.