The Federal Board of Revenue (FBR) has introduced special priority-based rules under the Sales Tax Rules, 2006 (updated for tax year 2026) to ensure faster and automated sales tax refunds for exporters. These rules are designed to improve liquidity, reduce delays, and minimize human intervention through digital processing systems.
The exporter-specific refund mechanism is governed under Rules 39B to 39G, forming a dedicated chapter for export-related refunds.
📌 Rule 39B – Who Can Apply for Export Refunds?
These special rules apply to:
✅ Export-Oriented Sectors (From July 2019 Onwards)
• Textile
• Carpets
• Leather
• Sports goods
• Surgical instruments
✅ All Exporters (From October 1, 2024 Onwards)
• Refund claims filed on account of export of goods, regardless of sector
⚠ Refund claims for the five traditional sectors prior to July 2019 are processed under old rules applicable as of June 30, 2019.
💰 Rule 39C – How Much Refund Can an Exporter Get?
The refund amount is capped at the lower of the following:
✔ Actual input tax consumed in exported or zero-rated goods
✔ A refund ceiling set by FBR, based on:
o Percentage of export value, or
o Amount per unit of exported quantity
👉 This ensures refunds remain aligned with real tax incidence.
📝 Rule 39D – Filing & Processing of Refund Claims
• Monthly sales tax return (STR-7) serves as the refund claim
• Amount declared in Column 29 is treated as the claimed refund
• No separate electronic refund application is required
📎 Annex-H Flexibility
• Return may be filed without Annex-H
• Annex-H must be submitted within:
o 120 days (manufacturers)
o 180 days (commercial exporters)
• The date of Annex-H submission is treated as the refund filing date
⏳ The Commissioner may grant a 60-day extension on valid grounds.
⚙ Rule 39E – Risk-Based Refund Processing
All refund claims are evaluated through the Risk Management System (RMS):
✅ Low-risk claims → routed to FASTER
⚠ Higher-risk claims → processed under Chapter V (STARR module)
🚀 Rule 39F – FASTER Module & Refund Timelines
Refunds processed under FASTER are:
✔ Fully automated and system-verified
✔ Paid within 72 hours of claim submission
✔ Electronically transferred via State Bank of Pakistan to the exporter’s bank account
Special Conditions
• Commercial exporters receive refunds after realization of export proceeds
• Inadmissible portions are re-checked weekly
• After 8 validation cycles, unresolved amounts move to STARR
📂 Rule 39G – Post-Refund Scrutiny & Miscellaneous Rules
• Supporting documents are required only if demanded by tax authorities
• Approval of the Commissioner is mandatory for document requests
• Export proceeds realization certificate or bank credit advice is mandatory for commercial exporters
• FBR retains the authority to shift any claim to STARR, if required
✅ Key Takeaway for Exporters
The 2026 rules aim to deliver speed, transparency, and certainty in exporter refunds through automation and risk-based checks. Exporters who file accurate returns, timely Annex-H, and valid export documentation can benefit from refunds within days instead of months.
Disclaimer: This article is intended for general informational purposes only and does not constitute tax, legal, or professional advice. Sales tax laws, rules, and refund procedures may change and are subject to interpretation by the Federal Board of Revenue (FBR). Exporters are advised to consult relevant FBR notifications or seek guidance from a qualified tax professional before filing refund claims.