The Federal Board of Revenue (FBR) has streamlined the processing of sales tax refund claims through the STARR (Sales Tax Automated Refund Repository) channel under Rule 30 and Rule 31 of the Sales Tax Rules, 2006, as updated for Tax Year 2026. This digital mechanism aims to enhance transparency, reduce delays, and ensure faster disbursement of legitimate refunds.
What is the STARR Channel?
The STARR channel is an automated system that electronically processes sales tax refund claims by cross-matching taxpayer data, applying risk-based parameters, and generating a detailed analysis report before approval.
Step-by-Step Processing of Refund Claims under Rule 30
🔍 Step 1: Automated System Verification
Once a refund claim (or part of it) is routed to STARR, the computerized system cross-matches soft copy data with records available in FBR databases.
The system then:
• Applies risk parameters
• Generates an analysis report
• Identifies admissible amounts
• Flags non-validated portions with objections
🧾 Step 2: Review by Processing Officer
The Processing Officer reviews the claim along with the system-generated analysis report and forwards the complete file to the Officer-in-Charge, including recommendations for further action.
🕵 Step 3: Inquiry or Audit (If Required)
If any amount is not cleared by STARR or further verification is required:
• An inquiry or audit may be initiated
• Prior approval of the Additional Commissioner is mandatory
• The refund claimant is informed accordingly
✅ Step 4: Sanction of Refund
For the portion verified by the system and found admissible:
• The Officer-in-Charge sanctions the refund
• Issues an electronic Refund Payment Order (RPO)
• Maintains a signed paper copy for record
📤 Step 5: Transfer to CSTRO
The approved RPO is electronically forwarded to the Centralized Sales Tax Refund Office (CSTRO) for payment processing.
Payment of Refund under Rule 31
💳 Mode 1: Cheque Issuance
Upon receipt of RPO through STARR:
• The CSTRO officer and treasury officer sign the crossed cheque
• Cheque is issued in favor of the claimant
• Delivered via courier to the registered address
A daily payment advice statement is also sent to the State Bank of Pakistan (SBP).
🔁 Handling Returned Cheques
If a cheque is returned by SBP or the claimant:
• The cheque is cancelled
• Attached with the counter-foil for record purposes
🚀 Mode 2: Direct Bank Credit (Preferred)
Alternatively, CSTRO may:
• Electronically transfer approved RPO details to SBP
• Credit the refund directly into the claimant’s declared bank account
• Send claimant-wise bank advice duly signed by authorized officers
Key Takeaway for Taxpayers
The STARR channel refund mechanism for Tax Year 2026 ensures:
• Faster processing
• Reduced human intervention
• Greater transparency
• Improved compliance
Taxpayers are advised to ensure accurate data filing and updated bank details to avoid delays in refund processing.
Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. While care has been taken to ensure accuracy based on the Sales Tax Rules, 2006 (as updated for Tax Year 2026), taxpayers are advised to consult relevant laws, notifications, or a qualified tax professional before filing or pursuing any sales tax refund claim.