E-credit of refunds: IBAN to prevent misdirection of funds

The Federal Board of Revenue's condition for sales tax registered taxpayers to have updated International Bank Account Number (IBAN) for availing direct credit refund facility would ensure deposit of the amount in correct bank account of refund claimant.
Sources told Business Recorder on Monday that IBANs would prevent misdirection of funds and ensure deposit of the amount in the correct bank account of refund claimant. "Updated IBANs would double check the accurate name of claimant, bank account numbers and other details for electronic transfer of the amount in the right bank account number," they added.
The IBAN contain all such details needed to verify information. As the refund amount would be transferred electronically, FBR wanted to ensure that the amount should be properly credited to the refund claimants. Therefore, the FBR has asked the sales tax registered taxpayers to update their account numbers for availing direct refund credit facility through banks.
Sources said that the FBR will also electronically inform taxpayers about the intimations of direct credit of sales tax refunds into their bank accounts to facilitate business community. The irrespective of sectors/industries, the FBR will issue sales tax refund payments to exporters whose Refund Payment Orders (RPOs) were issued till June 30, 2016. Last payment of sales tax refund to the exporters, whose refund payments orders were issued till April, 2016 was made in August 2016. Under the proposed system, the payment would be made of all RPOs issued till June 2016.
The FBR has finalised arrangements for direct credit of sales tax refunds to the declared bank accounts of the refund claimants. It is expected that the new system would soon become operational, sources said. Presently, the FBR issues refund cheques to the claimants. Sometimes cheques are delayed or undelivered at declared addresses due to one reason or another. The new system would end issuance of cheques to the refund claimants and directly credit the amount into their bank accounts.
The FBR' system would immediately generate an email to the taxpayer as soon as the amount has been electronically deposited into the taxpayers' bank account. The Centralised Sales Tax Refund Office (CSTRO) would electronically transfer details of approved Refund Payment Orders to the State Bank of Pakistan (SBP) for direct credit of sales tax refunds to the declared bank accounts of the claimants. The CSTRO shall also prepare a statement of payment advice for all cheques issued on the day and the same shall be sent to SBP duly signed by the signatory and co-signatory. The CSTRO may electronically, transfer the details of approved Refund Payment Order to the SBP for direct credit to the declared bank account of the claimant and the intimation of such advice shall be given to the claimant.