KARACHI: Federal Board of Revenue has rejected all refund claims generated against export proceeds to Afghanistan by invoking certain provisions of the Export Policy and Procedures Order 2000.
According to sources in the Regional Tax Office (RTO) Karachi, any refund created against sales tax paid on local purchases and subsequent supplies provided to buyers in Afghanistan and via Afghanistan to the Central Asian Republics are not admissible claims.
The government had issued guidelines through the Export Policy and Procedures Order 2000 through SRO 482(I)/2000 under which exports are not entitled to any duty drawback and zero rating of sales tax on exports to Afghanistan, sources said.
However, duty drawback is allowed at 7.5 percent on exports to Afghanistan and via Afghanistan to the Central Asian Republics that are made on advance payment received by local suppliers or against an irrevocable letter of credit issued by a recognised bank in foreign currency.
Similar restrictions are found in SRO 190(I)/2002, issued by FBR regarding the zero-rating of sales tax on exports to Afghanistan and via Afghanistan to Central Asian Republics, sources added.
