Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh Tuesday directed Federal Board of Revenue (FBR) to take input and suggestions from the textile exporters and simplify the H-Form (stock statement) within a week to expedite the processing and payment of Sales Tax refunds, and issue nearly Rs 10 billion worth of customs duty drawback to the exporters.
He gave the instruction during a meeting with the office-bearers and members of All Pakistan Textile Mills Association (APTMA). Adviser to the Prime Minister on Institutional Reforms & Austerity Dr Ishrat Hussain, Adviser to Prime Minister on Commerce, Textile, Industry and Production Abdul Razak Dawood, Chairman Task Force on Textile Ali Habib, Chairman FBR Syed Shabbar Zaidi, former finance minister Shaukat Tareen and Secretary Finance Naveed Kamran Baloch were also present among others.
The exporters have requested the FBR to defer the FASTER system and pay pending refunds for five months from July-November 2019 under the normal system and meanwhile simplify the annex-H under FASTER system. If the FASTER system is unable to pay refunds in 72 hours, it should be temporarily deferred.
Sources said that there are two main issues in filing of annex-H by the exporters. Firstly, minimum information be sought from exporters from stock statement. Secondly, there are issues of comprehension during filing of stock statement despite training sessions arranged by the FBR.
Dr Abdul Hafeez Shaikh told the exporters that the government is not at all interested in keeping their money held up for any length of time and the government is willing to listen to and accommodate any solution or recommendations from the exporters to simplify the H-Form and ensure a prompt payment of sales tax refunds to them. He also directed the FBR to expedite the payment of nearly Rs 10 billion worth of customs duty drawback to the exporters.
FBR Chairman Shabbar Zaidi told the meeting that FBR has so far received claims for sales tax refunds to the tune of Rs 10.14 billion pertaining to the period from July to October 2019 and cases amounting to Rs 8.02 billion have already been processed for payment out of which 1,604 cases have been accepted for payment which would be made at the earliest.
Earlier, the APTMA leaders and members told the adviser they were happy and satisfied with the documentation drive of the government and want to process their claims for sales tax refunds through the newly-introduced Form-H. They said they have formulated their recommendations to further simplify the Form-H in view of certain problems being faced by them in filling out the form.
According to the FBR, in the wake of rescission of SRO 1125(I)/2011, the FBR had committed with the exporters of the export-oriented sectors, i.e. textiles, leather, carpets, sports goods and surgical goods that refunds shall be paid to them within 72 hours of filing of refund claim. For this purpose, FASTER refund module has been developed, which shall process claims of exporters of five export-oriented sectors for the tax period July 2019 and onwards.
The FBR has earlier clarified that submission of Annexure-H, which is a form in the monthly sales tax return, shall be treated as submission of refund claim. The exporters are facing some difficulties in filing of their tax refund claims (Annexure-H) under FASTER. Many claimants have approached the Board with request that they may be allowed revision of their return on the ground that the entries made in Annexure-F do not match with those in Annexure-H. It is accordingly clarified that refund is processed on the basis of entries in Annexure-H, said the FBR. The entries in Annexure-F have no bearing on refund claim except that carry forward of value addition tax is excluded from refund amount. Accordingly, the claimants are advised not to revise the returns on the ground that entries in Annexure-F do not match with those in Annexure-H. They should submit Annexure-H, if not already submitted, so that their claims can be processed. Further, field formations are advised not to draw an adverse inference if the Annexure-F does not match with Annexure-H in returns already submitted, the FBR added.