ST refund facility in short shipment cases

Taking a major step to facilitate payment of sales tax refunds to exporters, the Federal Board of Revenue (FBR) on Friday allowed processing of refund claims involving ''short-shipment'' in cases where Risk Management System (RMS) clears the claim under the Expeditious Refund System (ERS). The FBR issued Sales Tax General Order No 51 of 2010 here on Friday.
Sources said that the ERS disqualifies refund claims involving ''short-shipment''. Such cases of ''short-shipment'' were not processed by the RMS of the electronic refund system due to checks in the system. Keeping in view practical problems faced by the exporters, the FBR has relaxed the condition of short-shipment for processing of claims filed by the manufacturers-cum-exporters.
Under the amended condition, the FBR has specified two different conditions pertaining to short-shipment. First, exporters would specify that no short shipment is involved in this case and also specify the value of exported goods which involves refund of sales tax. In the Second case, the exporter has the option to mention that the short shipment is involved in this case but specifies the value of exported goods (excluding short shipment) and amount involving sales tax refund. In this way, two options would be provided to the exporters to mention the amount involved excluding short-shipment to become eligible for processing of claim under the ERS. However, the Risk Management System has to declare that the refund claim in question should qualify despite short-shipment as per sales tax general order 51 of 2010.
Under the qualification criteria for expeditious processing and payment of refunds, the registered person has to be ''active taxpayer'' and the amount of refund claim has also been claimed in the corresponding Sales Tax / F. E. Return. Moreover, the registered person should be registered as manufacturer-cum-exporter for this refund claim period. All the payments for purchases have to be made through banking instruments, by the registered person, as required under section 73 of the Sales Tax Act, 1990.
According to the qualification criteria, the refund should be claimed only to the extent of stock consumed. Refund claim amount has not been adjusted/claimed earlier. No short payment should be due against any of the returns filed so far. All the utility connections like electricity, gas and telephone for which inputs are claimed in this refund should be used in the business premises and full payment of those bills have been made. The brought forward input tax amount in this claim from carry forward input tax amount of the previous claim(s) does not include quantities of raw material consumed in the exported goods covered in this claim. All the information provided in the RCPS format and this declaration is correct and the registered person shall be liable to legal action under the Sales Tax Act, 1990 in case of any misdeclaration noticed by FBR staff posted in HQ or field formations, the qualification criteria for expeditious refunds added.