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ISLAMABAD: The Federal Tax Ombudsman (FTO) has taken notice of the non-compliance with a major decision of the Economic Coordination Committee (ECC) of the Cabinet by the Export-Oriented Sector Registration Cell (ESRC), FBR in the processing of the cases of export companies for availing concessionary tariff regime.

In this regard, the FTO has issued an order here on Friday.

According to the FTO order, the ECC had directed the FBR, the Ministry of Commerce, and other stakeholders to devise a standard operating procedure (SOP) for the enrolment of registered persons under the export-oriented sectors (erstwhile zero-rated sectors) to qualify concessionary regime of electricity, RLNG and gas tariff.

Under the scheme, a designated cell, i.e., the Export-Oriented Sectors Registration Cell (ESRC) was established and mandated to examine the particulars and recommendations of the respective Associations and counter-verify particulars of the taxpayers including declarations in the registration profile, etc.

The said circular 4 of 2020 though provides that discrepancies spotted by the ESRC during scrutiny/ verification of data forwarded by concerned trade associations with the registration profile maintained by FBR, will be referred to field formation for ground check, report and recommendation, yet the complainant alleges that instead of expeditious processing of the claims of export concerns ESRC has indulged into an unauthorized exercise, which is tantamount to audit, the FTO said.

It has been observed that in a number of cases after the removal of objections raised by the ESRC the cases were recommended for concessionary tariff but delay caused in such cases took heavy toll of exporters as they had to suffer the burden of standard tariff during the period of pendency of case at ESRC.

Understandably this regime is exposed to the threats of misstatements, mis-declarations and even tax fraud but such risks must not overshadow the underlying priority of the ECC, i.e., expeditious processing of genuine cases. Cases suffering from some procedural lapses and other discrepancies in return profile need to be shared with concerned field formations having legal jurisdiction and powers to address the said hazards through legal ways and means, the FTO order said.

The export sector being the lifeline for Pakistan’s economy merits the highest attention, compassion and care. By no means should it be hostage to any delay due to routine official rigmarole, it said.

During the hearings, the complainants vehemently reiterated their allegations and shared details of delay caused by the ESRC in forwarding of their cases to Ministry of Commerce, Government of Pakistan. They also agitated that during the time taken by ESRC they have to pay standard tariff which not only put an extra burden on exporters but it reduces their competitiveness in the market, as well.

The findings of the FTO revealed that the instant case facts clearly indicate that while processing the case of the complainant, ESRC has failed to conduct the proceedings in the spirit envisaged by ECC.

The ESRC instead of forwarding the case to the Ministry of Commerce had referred the case of the complainant to LTO Karachi on 19th April 2022 and till 8th June 2022 there was an unabated delay. Ultimately this case was forwarded onwards on 22nd June 2022 only after the intervention of this office. Such a delay, inattention and ineptitude is tantamount to maladministration in terms of section 2(3) (ii) of FTO Ordinance, 2000.

The FTO has directed the FBR to ensure that cases, received by the ESRC from trade bodies/ associations are processed on fast track, conducting proceedings on a day-to-day basis. The ESRC strictly confines itself to the dictates of Circular No 4 of 2020, and processes the cases without any delay, forestalling any irretrievable loss to the exporters;(Discrepancies, if any observed by ESRC during the processing may be shared with the concerned field formations without delaying the process; Cases of glaring tax fraud may be shared with the concerned trade bodies, IR field formations in a transparent and fair manner, the FTO directed the FBR.

Instead of indulging in time-consuming correspondence, the ESRC must hold frequent consultative sessions and meetings with the concerned trade associations for expeditious processing; and report compliance on a monthly basis, the FTO order added.

Copyright Business Recorder, 2022

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