ISLAMABAD: The Federal Board of Revenue (FBR) is going to pay all the pending sales tax refunds by the end of August, 2016.
The FBR had been making payment of outstanding refunds over the years, resultantly, the total figure of outstanding refunds had been lowering with the passage of time. Presently, the total amount of outstanding refunds has been reduced to around Rs 100 billion.
The very issue of outstanding sales tax refunds has been a matter of worry for both the importers and exporters because both have been lamenting against the delayed payment of refunds. They had also been declaring delayed payment of sales tax refunds equal to drying up their capital.
“Now FBR will only pay those refunds will be paid whose Refunds Payment Orders (RPOs) have already been approved” a well placed source at FBR told Customs Today.
The source said that FBR was making progress on the issue of resolving the pending sales tax refunds under the existing scheme on Drawback of Local Taxes (DLTL). Similarly, Technology Up- gradation Fund (TUF) scheme for the textile sector is being implemented since July this year and the scheme has made huge progress in this regard.
Moreover, the source said that the facility of duty free import of textile machinery is also being implemented and under this scheme mark-up rates on export refinance facility have been brought down to 3.0%. Furthermore, the source added that sales tax of five export oriented sectors namely textile, leather, sports goods, surgical goods and carpets had been made part of zero rated tax regime.
While giving a background to this issue, the source said that the reduced mark-up rate on long term financing facility for 3-10 years duration from around 11.4% to 9.0% to allow export sector industries to make investments on competitive basis in fiscal year 2015. It was further reduced to 7.5% in February last year and was more brought down to 6.0% in July 2015, the rate were further reduced to 5% in November 2015.
