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Tag: sales tax refund

  • FBR enhances refund to export ratio

    FBR enhances refund to export ratio

    ISLAMABAD: Federal Board of Revenue (FBR) has revised the processing parameters and increased refund to export ratio to 15 percent.

    According to Sales Tax General Order (STGO) No. 05 of 2021, the FBR announced to re-fix the ceiling of parametric refund-to-export ratio from the previous 12 percent to 15 percent of the export value for processing of sales tax refunds of the commercial exporters.

    The FBR defined the commercial exporters as those exporters who do not have a manufacturing facility, and are not registered in the manufacturer category under the Sales Tax Act, 1990.

    “This shall be maximum ceiling of admissible refund processed through FASTER against valid exports after confirmation of realization of export proceeds as per rule,” the FBR said.

  • FBR constitutes refund resolution committee for KPK taxpayers

    FBR constitutes refund resolution committee for KPK taxpayers

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday constituted a provincial complaint resolution committee for settlement of issues relating of sales tax refund matters for Khyber Pakhtunkhwa (KPK).

    The FBR constituted the complaint resolution committee Khyber Pakhtunkhwa comprising following members for settlement of sales tax refund issues for taxpayers falling under the jurisdiction of field formations of Khyber Pakhtunkhwa:

    01. Senator Nauman Wazir Khattak: Convenor

    02. Chief Commissioner Inland Revenue, Regional Tax Office (RTO), Peshawar: Member

    03. Chief Commissioner-IR, RTO, Abbotabad: Member

    04. Adeel Rauf, CEO, Khyber Match and AYS Electronics, Peshawar: Member

    05. Saad Zahid, Director Rakaposhi Pharmaceuticals: Member

    06. Additional Commissioner (HQ), RTO, Peshawar: Member/Secretary

    Terms of Reference (TORs) of the complaint resolution committee shall be as under:

    i. Review the nature of complaints/issues possible solution and take immediate actions for resolution;

    ii. Follow up with concerned field formation till issue is resolved;

    iii. Maintain complete record of complaints/issues, mechanism adopted for resolution and post resolution action required, if any; and

    iv. share data with the Board on monthly basis including issues received, issues resolved and issues pending for resolution and reasons for pendency.

  • FBR constitutes refund resolution committees for Punjab taxpayers

    FBR constitutes refund resolution committees for Punjab taxpayers

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday constituted complaint resolution committees for settlement of issues relating to sales tax refund matters for the taxpayers in the province of Punjab.

    The FBR constituted two complaint resolution committees for Punjab North and Punjab South.

    The complaint resolution committee Punjab (South) shall comprise following members for settlement of sales tax refund issues of taxpayers falling under the jurisdiction of field formation of Multan, Bhawalpur and Sahiwal:

    Rehman Naseem, ex-Senior Vice Chairman, All Pakistan Textile Mills Association: Convener

    Chief Commissioner Inland Revenue, Large Taxpayers Office (LTO), Multan: Member

    Chief Commissioner-IR, Regional Taxpayers Office (RTO), Multan: Member

    Filza Mumtaz, CEO, SHAHS and WEEN, ex-president, Women Chamber of Commerce and Industry (WCCI), Multan: Member

    Khawaja Anees, Director Mahmood Group of Companies, Multan: Member

    Additional Commissioner (HQ), LTO, Multan: Member/Secretary

    The complaint resolution committee Punjab (North) shall comprise following members for settlement of sales tax refund issues of taxpayers falling under the jurisdiction of field formations of Lahore, Faisalabad, Gujranwala, Sargodha and Sialkot:

    Gohar Ejaz, Patron In Chief, APTMA Lahore: Convener

    Chief Commissioner-IR, RTO, Lahore: Member

    Dr. Quratul Ain Irfan, Vice President, Pacific Pharmaceuticals, Lahore, Member

    Almas Hyder, Former President, Lahore Chamber of Commerce and Industry (LCCI), Lahore: Member

    Mohammad Raza Baqir, Executive Director, APTMA Lahore, Member

    Additional Commissioner (HQ) RTO, Lahore: Member/Secretary

    Terms of Reference (TOR) of the complaint resolution committees are as under:

    (i) Review the nature of complaints/issues possible solution and take immediate action for resolution;

    (ii) Follow up with concerned field formations till issue is resolved;

    (iii) Maintain complete record of complaints/issues, mechanism adopted for resolution and post resolution action required, if any; and

    (iv) Share date with FBR on monthly basis indicating issues received, issues resolved and issues pending for resolution and reasons for pendency.

  • FBR decides releasing missing amounts of sales tax refunds

    FBR decides releasing missing amounts of sales tax refunds

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday decided to release missing amounts of sales tax refunds that were stuck up due to design flaws in the Fully Automated Sales Tax e-Refunds (FASTER) System.

    In this regard the FBR issued Sales Tax Circular No. 03 of 2020 to prescribe standard procedure for sanctioning of missing amounts stuck in FASTER system due to system glitches.

    The FBR said that in the wake of rollback of zero-rating extended through SRO 1125 of 2011 issued under Section 3(2)(b) and (6); 8(1)(b); and 71 of the Sales Tax Act, 1990 with effect from January 01, 2012, the FASTER system was introduced to process and sanction exporters’ refunds expeditiously.

    Although, FASTER was rolled out inside the very first quarter of tax year 2020, yet it continued to malfunction on multiple counts producing suboptimal outcomes, the FBR added.

    “One evidence of FASTER’s malfunctioning was that the system would simply miss out on sales tax credits of various taxpayers stalling processing of their refund claims,” the FBR said, adding that this system glitches created problems for exporting taxpayers in terms of uncertainty and stuck-up liquidity, and for the tax administration in terms of credibility deficit.

    The FBR said that the matter was analyzed threadbare at the head office, and found out that the problem of missing amounts cropped up due to the very designing of the FASTER module plausibly on three counts, namely:

    (i) FASTER was programmed to pick the least of the three opening balances of carry forward of previous month from (a) sales tax return; (b) Annex-H; and (c) the e-RPO generated;

    (ii) FASTER module’s non-synchronization with STRIVE i.e. Serial 7a and 7b of the Sales Tax Return; and

    (iii) Misapplication of section 8b to certain exporters in FASTER module.

    “These design flaws resulted in wide-going anxiety amongst the exporters’ community as large number of missing amounts claimed by them was not being reflected on their e-RPO after processing by the system,” the FBR said, adding that the matter having two dimensions, that is, improving the system design for future glitch –free processing of refund claims in FASTER, and devising a mechanism to deal with the past missing amount cases expeditiously and judiciously, has been resolved as follows:

    (i) Future Processing Module

    The problem of opening balance has been overcome by de-linking the opening balance of Sales Tax Return and Annex – H effectively, and linking it to the previous e-RPO alone. Going forward, this improvement in the FASTER module will not only solve the issue of missing amounts arising due to opening balances but also the issue of non-synchronizing of FASTER system with the Sales Tax Return and application of Section 8B on certain exporters.

    (ii) Process of Past Missing Amounts

    The issue of past missing amounts has been solved as under:

    (a) That, in all cases wherein the missing amounts could be effectively pulled up by the system, have already been communicated to taxpayers for re-filing after adequate modifications in the refund claims/sales tax return;

    (b) That, in all remaining cases, where a taxpayer believes that a material amount of his refund claims has been unaccounted for, he may apply to the Deputy Commissioner concerned; and

    (c) That, the deputy commissioner will examine the case and after due verification, will sanction the due amount.

    The FBR directed chief commissioners concerned to keep a complete log of the pending missing amount refund cases in their formations and ensure their disposal and processing in the shortest possible time as per law.

  • FBR amends rules for filing, processing of refund claims

    FBR amends rules for filing, processing of refund claims

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday amended Sales Tax Rules, 2006 for process and claims of refunds by commercial exporters.

    In this regard the FBR issued SRO 1172(I)/2020 to make changes in the Sales Tax Rules, 2006 regarding filing and processing of refund claims.

    Following rules have been amended:

    Rule 28. Filing and processing of refund claims.−(1) For all the refund claims under section 10 and 8B of the Act, for the tax period July, 2019 and onwards, the data provided in the monthly return shall be treated as data in support of refund claim and no separate electronic data shall be required. The amount specified in column 29 of the return, as prescribed in the form STR-7, shall be considered as amount claimed for the purposes of claim under section 10 of the Act, once the return has been submitted along with all prescribed annexures thereof:

    Provided that, in case of claims arising from zero-rated supplies including exports, the claimant shall be able to submit his return without Annex H and the same may be filed separately at any time but not later than one hundred and twenty days of submission of the return without Annex-H. The date of submission of Annex-H shall be considered as the date of filing of refund claim. In other cases of refund, the date of submission of form STR-7A shall be considered as date of submission of refund claim and the same shall be filed within one hundred and twenty days of submission of relevant return:

    Provided further that in case of a commercial exporter, the claim shall be filed in the aforesaid manner within one hundred and twenty days, either after submission of the return without Annex-H, or after the date of issuance of BCA, whichever is later:

    Provided also that the period of one hundred and twenty days, as aforesaid, may be extended for a period not more than sixty days, by the Commissioner having jurisdiction, if the claimant so requests, thereby providing reasons justifying the delay in submission of claim:

    Following new proviso has been added through the SRO:

    “Provided also that if a claimant is registered as commercial exporter and exporting same state of goods, the period of one hundred and eighty days shall be reckoned from date of filing of return or the date of issuance of BCA, whichever is later.”

    (2) The registered person claiming refund in the aforesaid manner shall maintain and keep all the paper documents relating to the refund claim, such as invoices, credit notes, debit notes, goods declarations, bank credit advice, banking instruments etc. in his office and may not submit the same along with the refund to the concerned Regional Tax Office or Large Taxpayers’ Unit. The same shall be presented to the said offices if so required by the officer-in-charge for processing of the refund claim or post-refund scrutiny.

    Rule 39D. Filing and Processing of refund claims.−The data provided in the monthly return shall be treated as data in support of refund claim and no separate electronic data shall be required to be provided. The amount specified in column 29 of the return, as prescribed in the form STR-7, shall be considered as amount claimed, once the return has been submitted along with all prescribed annexes thereof:

    The first proviso has been amended through the SRO 1172(I)/2020:

    Provided that the claimant may submit his return without Annex-H and the same may be filed separately at any time but not later than one hundred and twenty days or as the case may be not later than one hundred and eighty days for commercial exporters of submission of the return without Annex-H. The date of submission of Annex – H shall be considered as the date of filing of refund claims.

    Provided further that the period of one hundred and twenty days, as aforesaid, may be extended for a period not exceeding sixty days, by the Commissioner having jurisdiction, for reasons to be recorded in writing on the basis of an application made by the claimant.

  • No refund claim to stop at pre-processing stage: FBR

    No refund claim to stop at pre-processing stage: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Saturday said that it has launched an updated version of automated refund payment system and taxpayers will not face hurdles in processing their claims.

    (more…)
  • FBR asks exporters to resubmit claims for stuck-up refunds

    FBR asks exporters to resubmit claims for stuck-up refunds

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday offered exporters to resubmit their refund claims which were stuck up due to any reason.

    The FBR said that sales tax refund claims of exporters, which were stuck up at pre-processing stage in Fully Automated Sales Tax e-Refund (FASTER) system due to any reason including erroneous filing stand rolled back to provide an opportunity to exporters to review and resubmit their claims after removing shortcomings by September 20, 2020.

    All such refund claimants have also been informed electronically, the FBR added.

    Two days ago, the FBR issued instructions to all chief commissioners Inland Revenue regarding sales tax refunds.

    The FBR said that it had been observed that sales tax refund claims prior to July 2019 were pending for first processing as well as deferred processing, requiring over-ruling of objections raised by Risk Management System (RMS).

    In order to liquidate the pendency of deferred claims, the FBR has already issued circular No. 01/2020 dated August 04, 2020 for rule-based over-ruling objections. “The purpose of circular is to bring uniformity into the system, and to avoid discretion and delay in processing of refunds,” the FBR added.

    The FBR also informed the chief commissioners that processing of refunds should not be stopped on pretext that some case is pending against the claimant at any adjudication or appellate forum unless there is specific stay against processing of refunds. “In cases where the discrepancies pointed out by the department relating to refund claims are held twice in favor for the claimant, refunds be processed even if field office has preferred further appeal, unless specifically barred by the appellate forum or the board.”

    The FBR directed that field formations should ensure that pending refunds of claimants are processed in routine on the basis of Circular No. 01/2020.

  • FBR issues SOPs for over-ruling objections on refund claims

    FBR issues SOPs for over-ruling objections on refund claims

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued procedure for over-ruling objections raised by Fully Automated Sales Tax e-Refund (FASTER) in order to facilitate taxpayers in obtaining their stuck up amount.

    The FBR issued Sales Tax Circular No. 01 of 2020 / IR-Operations to unveil the Standard Procedure for Over-Ruling the STARR objections on Sales Tax Refund claims.

    The FBR said that in order to bring uniformity into the system, and avoid discretion and delays in the processing of refund there is need to issue rules for the purpose at the national level.

    Accordingly, in suppression of all previous instructions, SOPs and guidelines on the matter, the new procedure has been laid down. Under the procedure an officer not below the rank of additional commissioner-IR shall over-rule the objections raised by the electronic system after completion of all legal formalities and scrutiny of record of objections.

    The FBR issued details of objections usually pointed out by the electronic system on which the tax officer may over rule.

    The FBR, however, said that the refund claimant shall furnish soft copies of all the scanned documents which are under dispute requiring over-ruling.

    The revenue body further said that where, result of automated processing of refund claims through FASTER or ERS, the claimants are not satisfied with the outcome of automated processing including calculation of refund or carry forward amounts or amounts deferred, the claimant may apply to the FBR through concerned chief commissioner for processing of the refund claim or revision of Annexure – H mentioning the reason.

    After scrutiny of the written request of the claimant, the Chief (Projects & Refunds) may allow reprocessing of the claim or revision of Annexure-H for necessary corrections.

    The FBR said that the procedure for over-ruling has become applicable with effect from August 01, 2020.

  • SBP seeks feedback on automaton of tax refund payment

    SBP seeks feedback on automaton of tax refund payment

    KARACHI: State Bank of Pakistan (SBP) has invited business community to provide feedback on an ongoing project of automation of payment of tax refunds by the central bank.

    Dr. Reza Baqir, Governor, SBP held the online meeting with the business community today to seek feedback on an ongoing project of automation of payment of tax refunds by SBP.

    The meeting was attended by the office bearers of Pakistan Business Council (PBC), Federation of Pakistan Chambers of Commerce and Industries (FPCCI) and Chambers of Commerce and Industries of various cities.

    Governor SBP in his opening remarks introduced SBP’s Automation of Payment of Tax Refunds Project saying that after automation of government’s revenue collections, efforts are underway by SBP to automate the government’s payments to ensure transparency, efficiency and public convenience.

    He said that improving ease of doing business is one of the shared goals of the government and SBP for its significant potential impact on boosting economic activity in the country.

    Governor Baqir remarked that Automation of payment of Tax Refunds Project is a part of SBP efforts in this direction in collaboration with FBR and Pakistan Customs. Adding further, he said that since the project is ultimately going to benefit the businesses, it is important that the system is developed in consultation with all the stakeholders including the businesses.

    He emphasized that, in this regard, feedback of businesses is very important since they are the key stakeholders.

    A senior SBP official gave a detailed presentation on the project elaborating that the project constituted two broader components, automation of payment of duty drawback claims and the automation of payment of sales tax refunds.

    After highlighting the issues in the existing mechanisms he explained that how the automation will simplify the processes and bring efficiency in terms of time saving and human resources.

    He highlighted that there will be minimal human intervention in processing and payment of refund claims as the system generated payment messages will be sent to SBP on real time basis through an interface between FBR/Pakistan Customs and SBP for crediting the funds in the claimants’ account.

    The representatives of Chambers of Commerce appreciated the initiative of SBP and provided valuable feedback. They also assured their cooperation to SBP in the development of this project of national importance.

  • FBR allows filing annex-H for July-Dec up to June 30

    FBR allows filing annex-H for July-Dec up to June 30

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday announced extension in date for filing annexure-H (stock position) up to June 30, 2020 for the period July – December 2019.

    Filing Annexure-H is mandatory for taxpayers to claim sales tax refunds.
    In an official memorandum issued, the FBR extended the time limit for filing of Annexure – H for the tax period July – December 2019 up to June 30, 2020.

    Annexure-H is a statement for providing stock position by taxpayers along with monthly sales tax return.

    The FBR from July 01, 2019 introduced expeditious payment of sales tax refunds within 72 hours subject to the true filing of Annexure – H.

    As per the Rules, refund will be treated as having been filed only after filing of Annexure H of the Sales Tax return, for which deadline of 120 days has been prescribed in the Rules and the same can be extended for a period of 60 days on the basis of approval from the Commissioner.