The Federal Board of Revenue (FBR) has allowed Customs officials (Assistant Collector and above) to decide sales tax refund claims filed by the importers relating to the import-related sales tax paid by them. The FBR has included a new rule (34A-Sanction of refund claims of import-related sales tax by the Collectorates of Customs) in the Sales Tax Rules 2006 through an SRO 918 (1)/2019.
According to the FBR, the sales tax refund filed by an importer for import-related sales tax paid in excess due to inadvertence, error or misconception, or as result of a competent adjudication or appellate authority, claimed within the period as prescribed under section 66 of the Sales Tax Act, may be decided and allowed by the concerned officer of Customs, not below the rank of an Assistant Collector. In the case of registered person while applying for refund to the concerned Customs Collectorate, the applicant must endorse a copy of the refund application to the Refund Division of the concerned Regional Tax Office (RTO) or Large Taxpayer Unit (LTU).
The concerned Collectorate of Customs shall not process the claim unless a confirmation from such Inland Revenue office, that no adjustment or payment of the amount claimed in refund has been made, has been received, the FBR said. The concerned RTO or LTU on receipt of a reference from Collectorate of Customs shall communicate such confirmation, or otherwise, within 30 days of receipt of the reference.
In case of an unregistered importer, the refund shall be processed by the concerned Customs Collectorate without prior reference to RTO or LTU, the FBR maintained. The sales tax refund files after issuance of refund payment order by the relevant Customs officer shall be sent through proper channel, in the case of registered person to the RTO or LTU concerned, and in the case of unregistered person to the nearest RTO where the Customs station is located.
The refund sanctioning authority of the Customs Collectorate shall mention the number and date, etc. of RTO's or LTU's confirmation of regarding non-adjustment of tax involved or non-payment of refund, if applicable, in his sanction order.
On receipt of such sanction order from Customs Collectorate by the concerned officer-in-charge in RTO or LTU, he shall make the entry of the sanction order in the Computerized System, and after obtaining permission of the Commissioner concerned, generate refund payment order (RPO) of the sanctioned amount for electronic transmission to the Centralized Sales Tax Refund Office (CSTRO). The amount of such sales tax refund shall be debited from the head of sales tax (on imports), FBR rules added.