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The claimants of sales tax refund bonds have been conveyed that bonds carry a simple profit of 10% per annum payable at the end of three-year maturity period i.e. against a bond of Rs 100,000, Rs 130,000 shall be paid. This has been mentioned in the guidelines issued by the Federal Board of Revenue (FBR) here on Friday pertaining to the Sales Tax Refund Bonds to be issued under section 67A of the Sales Tax Act, 1990.
According to the FBR, the bonds are transferable i.e. a refund claimant who has been issued the bond can sell the same to another person / bank at a price agreed between the two parties. The maturity period of bonds is three years from the date of issuance. The bonds shall be acceptable by banks as collateral for getting advances / loans.
The bonds carry a simple profit of 10% per annum payable at the end of maturity period i.e. against a bond of Rs 100,000, Rs 130,000 shall be paid after maturity to the holder of the bond. The bonds shall be payable against Refund Payment Orders (RPOs) as issued in favour of the claimant, the FBR said.
The claimant who opts for issuance of bond should have an account with Central Depository Company (CDC). They can provide this account number while submitting their option for bonds to the FBR. If a claimant does not have a CDC account, he still can opt for issuance of bonds. He will be guided regarding opening of CDC account, the FBR maintained.
In case the bond holder wants to sell / transfer the bond, the buyer / transferee should also have a CDC account. At the end of maturity period, the FBR shall pay the amount due under bond i.e. face value plus profit to the bond holder. If FBR decides, it can pay the amount due under bond to the bond holder including profit before maturity. This option is available only to the FBR.
The FBR said that the bond holder shall have to pay nominal fees to CDC on transfers / custody as provided in CDC schedule available at its website. The bond scheme pertains to sales tax refund only, the FBR added.

Copyright Business Recorder, 2019

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