Pending ST refund claims: take task force to task: World Bank

The World Bank (WB) review mission has informed the Federal Board of Revenue (FBR) that the clearance of pending sales tax refund is slow and the Task Force constituted for its clearance should be held accountable for delay in disposal of pending claims. It is learnt here that the FBR has received latest report containing the WB recommendations under the Tax Administration Reform Project (TARP).
The gist of WB recommendations has identified several issues hampering clearance of pending refunds. So far, the refund backlog reduction is slow and the inventory of refunds contains some very old claims. The inventory encompasses more small claims as compared to large claims.
The WB recommended that the Task Force on refund clearance should be accountable for not achieving the desired results. Secondly, the FBR has to increase the assigned resources to effectively handle this task. Thirdly, the Expeditious Refund System needs to be expanded to non-manufacturers-cum-exporters. Fourth, the ERS system needs further tuning to expedite clearance of refunds.
It has further been recommended that the FBR should increase the speed of the ''Sales Tax Automated Refund Repository Computer System'' (STARR) by enhancing the performance of the servers and allocating sufficient bandwidth for this application to ensure the field formations response time is decreased. The FBR should also make a decision on requiring e-filing of refund returns through the ERS for non-manufacturers. The FBR should further tune the ERS system updating its parameters based upon an analysis of transactions approved by the manual system but rejected by ERS, the WB action report added.
The Board has already allowed processing of refund claims involving ''short-shipment'' in cases where Risk Management System (RMS) clears the claim under the ERS. The ERS disqualifies the refund claims involving ''short-shipment''. Such cases of ''short-shipment'' were not processed by the RMS of the electronic refund system due to checks on the system. Keeping in view practical problems being faced by the exporters, the FBR has relaxed the condition of short-shipment for processing of claims filed by the manufacturers-cum-exporters.