February 03, 2020: The Federal Board of Revenue (FBR) on Monday issued a clarification on the news aired on electronic media about the issuance of fake refunds.
An FBR statement issued here explained that two processes were being used to deal with refund cases.
The first, it said, was the processing of refunds through automated system for the exporters. In this process, the audit of the refund is conducted after the issuance of refunds.
The other system of refund issuance has been devised for the taxpayers not associated with the export sector.
The refunds issued through this mode are called the “carry forward refunds.” Such refunds are issued once in a year. The audit is conducted before the issuance of such refunds.
The FBR clarified that taxpayers involved in presenting the wrong invoices were dealt strictly and recovery was made from them.
Moreover, penalty and default surcharge is also imposed to curb this practice.
Sometimes, the audit process of refunds takes longer period of time which may cause problem of liquidity for the exporter, in case of delayed issuance of refunds.
To avert liquidity crunch for the businesses, the refunds are issued and the scrutiny is conducted afterwards.
There are certain inbuilt checks within the system to match the input claim by one person with output claim by another person.
To avoid revenue loss, FBR has almost resolved the issue of fake invoices, the statement added.
Sometimes, it becomes a little cumbersome and lengthy to check the flying invoices but the scrutiny is conducted in all the cases.
FBR has computer analytics system of Crest, it said adding that It was baseless to assume that FBR does not conduct the scrutiny.
The processing of the case may take time but it is certain that all refund cases are audited.