FTO concerned at piling up of duty drawback claims

Federal Tax Ombudsman (FTO) Dr Muhammad Shoaib Suddle has expressed concern over huge blockage of rebate/duty drawback claims of exporters by the customs authorities despite repeated directions of the FTO on clearance of pending claims. In a latest order, FTO has given its findings in the case of pilling up of rebate/duty drawback claims of exporters, reflecting total failure of customs department in clearance of pending duty drawback claims.
According to findings of the FTO, despite the FTO's repeated directions for processing and payment of rebate/duty drawback claims without delay, a large number of claims piled up without any justification, which tantamount to maladministration as defined under Section 2(3) of FTO Ordinance. To resolve the issue on a sustainable basis, the FTO has directed the Customs Department to file monthly progress report about pendency/disposal of rebate/ duty drawback claims.
The FTO has recommended the FBR to direct Collector Customs to ensure timely processing and payment of all pending rebate/duty drawback claims. The FBR should also submit a consolidated monthly report about pendency and disposal of rebate/duty drawback claims on the format already circulated to all the collectorates across Pakistan. The FBR should also take adequate steps to liquidate pendency of duty drawback claims on a sustainable basis and submit compliance report within 30 days.
Details of the case revealed that five complainants have sought indulgence of the FTO against withholding of their duty drawback claims. They have filed lists of their duty drawback claims and prayed that the Department be advised to pay the due amount due immediately and not delay payments in future.
In response to the notices of complaints issued to the Secretary, Revenue Division, Islamabad, the Department has filed para-wise comments pleading that duty draw-back claims are being paid regularly after thorough scrutiny, verification of documents and observing other legal formalities on first come first serve basis. According to the report submitted by the Department about status of duty drawback claims, which is on the top of the queue were sanctioned and rest of the claims being in queue would be sanctioned on their turn.
The complainants were supplied copies of para-wise comments but they did not opt to file a rejoinder. Parties were given opportunities of hearing. The authorised representative (AR) at the very outset submitted that a few cheques were issued by the Department but the same had been dishonoured. According to the AR, the duty drawback claims had been withheld without any justification.
The departmental representative (DR) explained that due to transfer of Deputy Collector who issued the cheques the bank returned the cheques as the signatures differed. The DR assured that as soon as the dishonoured cheques were returned, fresh cheques would be issued on the same day. The DR further submitted that it had been agreed between the Department and the Chamber of Commerce that each month about 5,000 duty drawback claims in the queue would be sanctioned. The DR submitted that due to transfer of two Deputy Collectors some delay took place in sanctioning of duty draw-back claims, and the pendency rose to about 14,000. However, in last 15 days about 3,000 claims had been sanctioned and all efforts were being made to clear the backlog at the earliest. The DR assured that all pending duty drawback claims of the complainants would be processed on their turn.
Despite the FTO's repeated directions for processing and payment of rebate/duty drawback claims without delay, a large number of claims kept piling up without any justification. The FTO has directed the department to file monthly progress report about pendency/disposal of rebate/duty drawback claims.