July 1, 2019 onwards: Processing of deferred ST refund claims delayed

The Federal Board of Revenue (FBR) has delayed processing of deferred sales tax refund claims from July 1, 2019 onwards.

According to the FBR's latest data (up to March 2020) on refunds issued under the "FASTER" system revealed that the deferred amount of claims stood at nearly Rs4 billion, the FBR data added.

Shabbir Ahmed, patron in chief, Pakistan Bed wear Exporters Association told Business Recorder that the exporters highly appreciate the FBR's move to clear pending refund claims.

It is highly appreciated that the FBR has paid Rs96 billion sales tax refunds during (July-April 15) 2019-2020 period against Rs21 billion in 2018-2019, reflecting an extraordinary increase of 357 percent.

Overall, the FBR had paid Rs175 billion refunds during (July-April 15) 2019-2020 against Rs107 billion paid in the same period of 2018-2019, reflecting an increase of 64 percent.

However, it is regretted that a major chunk of revenue to the tune of billions has been stuck up in deferred claims.

The valid claims cannot be declared as deferred without sold evidence of non-supportive documents and inadmissible claims.

The sales tax refund claims, which are legally admissible, cannot be declared as deferred under the law.

He stated that the FBR's last instructions to the chief commissioners were related to the old deferred cases.

The FBR's instructions openly admitted that field formations are deliberately delaying deferred claims, which is unfortunate.

But the FBR is not processing the deferred and partial deferred cases of sales tax refunds under the FASTER system from 1st July 2019 and onwards.

Till date, the claims are pending with the FBR and no processing of the above period are not being done in spite they are valid, so why the above periods these cases are not being processed?

Shabbir Ahmed stated that due to ongoing lockdown, exporters' shipments have been stopped and we have to pay salaries to workers, labourers and staff as well as suppliers of yarn, weavers, sizing, poly bags, hangers, cartons, zippers and etc as they have to pay salaries to them also.

He raised question that why the FBR is holding our deferred payments.

Exporters have requested the FBR chairperson to order field formations for immediate release of deferred claims for making payments during Ramazan, he added.