August 06, 2023 (MLN): The Federal Board of Revenue (FBR) will form a perpetual committee to expedite deferred cases of Sales Tax Refunds claims and also review other taxation issues and policy changes wherever required on a monthly basis, said a press release issued on Saturday.
Chairman Federal Board of Revenue (FBR) Malik Amjed Zubair Tiwana announced to formation of a perpetual committee comprising three representatives of the Karachi Chamber of Commerce & Industry (KCCI) and three Chief Commissioners of FBR, it added.
Chairman FBR, who was accompanied by senior FBR officials during his visit to KCCI, informed that Refund Payment Orders (RPOs) against all refund Claims till July 10, 2023, have already been issued whereas refund claims of more than Rs100 billion, which have been deferred by the system, would be reviewed by FBR-KCCI joint committee so that the process for issuing RPOs for such refund claims could be expedited.
Chairman FBR further stated that on average, refund claims of Rs1bn generate every day under the automated system which means FBR issues refunds of up to Rs30bn every month but the process was delayed in the recent past due to some system malfunctioning, however, the FBR was trying to make up to the same level by issuing maximum refund claims every month.
He said that there was no human involvement at all at any stage in processing refund claims but when the system defers any refund claim, it is forwarded to field formations who seek necessary documentation to finalize the precise amount of refund claims.
He informed that FBR has declared this year as the year of ‘Sales Tax Fraud Detection’ and actions have been initiated against those absconders who have taken money from manufacturers against supplies but haven’t submitted their outstanding taxes.
In response to concerns expressed over customs rebates, Chairman FBR formed another committee to address the issues relating to Customs especially the revision of fixed rebate rates. In this regard, the Chief Collector of Customs Karachi was nominated as a member of the committee by Chairman FBR.
Commenting on the DLTL issue, he said that although there was no provision for DLTL in the current budget the FBR will look into the possibility of arranging funds for DLTL by making adjustments in other heads so that the taxpayers’ liquidity problem could be reduced to some extent.
He said that all the administrative issues highlighted by KCCI will be promptly resolved but the policy-related issues can only be taken into consideration in next year’s budget.
While appreciating Chairman FBR’s announcement to form a committee to deal with ST refunds and other taxation policy-related issues, Chairman BMG Zubair Motiwala nominated Vice Chairman BMG Haroon Farooki, Vice Chairman BMG Jawed Bilwani, and Vice President KCCI Mohammed Haris Agar as members of the Committee.
“I hope that with the formation of this crucial committee, the refund process would pick up some pace”, he added.
He pointed out that Sales Tax Refund cases mostly comprise deferred payments, blacklisting, or discrepancies which were the biggest hurdle in way of smooth issuance of refund claims.
“Although the FBR claims of having refund claims of around Rs39.4bn these were probably clean refund cases only as the overall refund claims must be somewhere around Rs150 billion if all refund cases including those subjected to blacklisting, discrepancies or any other minor issue are also included”, he said.
He further mentioned that with a depreciation of the Pak Rupee against the US dollar and other currencies, the incidence of taxes paid by exporters on their inputs has drastically increased in terms of the rupee.
However, the rates of Rebate applicable on exports have remained the same which in percentage terms has declined due to devaluation. It is, therefore, requested to review and increase the rates of Rebate so that inflation and devaluation of Rupee could be adjusted.
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Posted on: 2023-08-06T11:09:19+05:00
