ISLAMABAD: Measures taken by the Federal Board of Revenue (FBR) have significantly reduced the volume of pending income and sales tax refunds.
The traders’ community has been lamenting against the delayed payment of income and sales tax refunds terming the delayed payment as equal to drying up their capital resulting in halting exports and making the doing of business costlier.
A well placed source at FBR, shared a list of number of measures taken by the FBR to reduce the volume of pending income and sales tax refunds with this scribe here. These measures include that FBR has automated systems in place for the issuance of income and sales tax refunds. For example, Sales Tax Automated Refund Repository (STARR) is a computerized system for issuance of sales tax refund where cases of refunds are liquidated in sequence of their dates of applications.
Secondly, centralized Sales Tax Refund Office (CSTRO) located at FBR Headquarters is in-charge of issuing the cheques. Refund Payment Orders received from the field formations are electronically queued up in CSTRO. These RPOs are then converted into cheques and issued on “First-in-First-out” basis.
Thirdly, the finance minister has also announced that in respect of all Sales Tax Refund Payment Orders issued before July 01, 2016, the payment of the sales tax refund shall be made by today (October 15, 2016).
Moreover, refunds are added to the opening balance during the year as a result of filing of new claims and the amount of refunds issued is subtracted there from. Due to conscious efforts of the FBR, pending refunds as percentage of collection have registered a substantial declining trend.
The data available with this scribe reveal that income tax refunds tune to Rs 91 billion including Rs 81 billion of corporate and Rs 10 billion of non corporate sectors were pending on end of June this year.
Similarly, 73304 cases of sales tax refund involving an amount of Rs 117 billion were lying pending on the aforesaid date. Moreover, 56187 cases of sales tax refund of related to export sector involving Rs 53 billion were lying pending on the sai
