Filing a sales tax refund claim with the Federal Board of Revenue (FBR) requires accuracy, proper timing, and compliance with prescribed rules. Any mistake can delay processing or result in rejection. To streamline refunds, Rule 28 of the Sales Tax Rules, 2006 (updated for tax year 2026) lays down a simplified and automated mechanism.
This guide explains how refund claims are filed, key deadlines, and documentation requirements to ensure timely disbursement.
🔍 What Is a Sales Tax Refund?
A sales tax refund generally arises when:
• Input tax exceeds output tax
• Supplies are zero-rated
• Refunds are claimed under Section 10 or Section 8B of the Sales Tax Act
From July 2019 onwards, FBR has fully integrated refund claims with the monthly sales tax return.
🧾 Filing of Refund Claims Through Monthly Return
✅ No Separate Refund Application Required
Under Rule 28(1):
• The monthly sales tax return (STR-7) itself is treated as the refund claim
• No separate electronic data submission is required
• The amount entered in Column 29 of STR-7 is considered the refund amount under Section 10
• The return must be submitted along with all prescribed annexures
👉 Interactive Tip: Double-check Column 29 before submission—this figure becomes your official refund claim.
📦 Special Procedure for Zero-Rated Supplies
For exporters and zero-rated suppliers:
• Return may be submitted without Annex-H
• Annex-H can be filed separately
• Must be submitted within 120 days of filing the return
• Date of submission of Annex-H is treated as the date of filing the refund claim
✔ This flexibility helps exporters avoid delays in return filing.
🗂 Other Refund Claims (Non Zero-Rated)
For refund claims other than zero-rated supplies:
• Form STR-7A must be submitted
• Must be filed within 120 days of submitting the relevant return
• The date of STR-7A submission is treated as the refund claim date
📁 Documentation & Record-Keeping Requirements
According to Rule 28(2), the claimant:
• Does not need to submit physical documents with the refund claim
• Must maintain records at the business premises, including:
o Sales tax invoices
o Debit and credit notes
o Goods declarations (GD)
o Bank credit advice
o Banking instruments
📌 These documents must be produced if demanded by FBR during:
• Refund processing, or
• Post-refund audit or scrutiny
⏱ Key Timelines to Remember (2026)
✔ Monthly return submission = refund initiation
✔ Annex-H / STR-7A deadline: 120 days
✔ Records to be retained for audit and verification
Missing deadlines can lead to refund lapse or objections.
✅ Best Practices for Faster Refund Processing
✔ File accurate monthly returns
✔ Ensure annexures match declared figures
✔ Maintain proper invoice trail
✔ Reconcile bank receipts and GDs
✔ Respond promptly to FBR queries
📌 Final Thoughts
The sales tax refund system for 2026 is return-driven, paperless, and time-bound. Businesses that understand Rule 28 of Sales Tax Rules, 2006 and maintain proper documentation can significantly reduce delays and improve cash flow.