Retrieval of billions of rupees ST refunds: LTU Karachi issues SOP to help manufacturers, exporters

KARACHI: The Large Taxpayers Unit (LTU), Karachi has issued the Standard Operating Procedure (SOP) to assist the manufacturers-cum-exporters for the retrieval of their billions of rupees sales tax refunds, ignored by FASTER system due to calculation errors.

The Fully Automated Sales Tax E-Refunds (FASTER) system has ignored billions of rupees sales tax refunds due to calculation errors and issued wrong Electronic Refund Pay Orders (e-RPOs), correspondingly that led creating serious financial difficulties for the manufacturers-cum-exporters.

Therefore, the LTU, Karachi in order to mitigate the hardships of manufacturers-cum-exporter refund claimants has issued SOP for the missing amounts of refund claims, which were not shown in e-RPOs due to calculation errors in FASTER system.

Moreover, the largest tax collecting arm of Federal Board of Revenue (FBR) will also provide facilitation in case where registered persons claim multi tax period, carry-forward based sales tax refunds in terms of rule 34 of the Sales Tax Rules, 2006.

The SOP shall apply to refund claim filed through FASTER system for the tax period from July 2019 to November 2020 which were already processed and sanctioned through FASTER against which eight validation checks as envisaged under Rule 39F of the Chapter V-A of the Sales Tax Rules, 2006 have been completed through FASTER, or any refund claim file which have not been processed through FASTER and still not shown complete refund claim amount while processing through manual processing by field staff.

According to the SOP, the aggrieved claimants shall furnish a written application along with the copies of e-RPOs, for the relevant tax period, FBR sales tax refund MIS (Report), relevant tax period’s sales tax return and other relevant documents required under the Sales Tax Rules, 2006. Moreover, the claimants shall also submit complete reconciliation statement of missed out refund amount and any objection memo issued by the system in respect of claim.

Consequently, the claim has properly been transferred from FASTER to STARR module of the concerned processing office for sales tax refund immediately.

It further said that the concerned processing officer and deputy commissioner upon receipt of electronic and physical record in respect of missed out amount would carry out detailed reconciliation of data and record available. Then, the concerned processing officer and deputy commissioner shall calculate the missing amount and reconcile the same with the reconciliation statement submitted by the claimant.

The officers shall also decide whether the amount so determined is to be paid as refund in relevant tax period based on consumption in export or is to be added to the carry-forward amount in subsequent tax period(s). The concerned officers of refund and the MIS officer shall maintain a log book containing all relevant data necessarily required for record / future consumption purpose.

Copyright Business Recorder, 2021