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The Federal Board of Revenue (FBR) has paid over Rs 29 billion sales tax refunds under the Fully Automated Sales Tax e-Refund (FASTER) system after processing 4606 cases, reflecting around 88 percent of total refund claims processed under the system.

According to the FBR's latest data on refunds issued under the 'FASTER' system revealed that so far 6081 sales tax refund claims were filed with annexure-H (stock statement) involving claims of Rs 37.6 billion. The FBR has processed 4606 claims involving an amount of Rs 33.36 billion, reflecting 90 percent of the claims. The FBR has sanctioned refunds of Rs 29 billion i.e. around 88 percent of the total claimed amount. The deferred amount of claims stood at nearly Rs 4 billion, FBR data added.

The FBR data further revealed that as compared to claims filed of Rs 37.6 billion under the FASTER system, the sanctioned amount totalled at Rs 29 billion after processing of 4606 claims.

When contacted, FBR Member Inland Revenue Policy Dr Hamid Ateeq Sarwar, who is also Spokesperson for the FBR told Business Recorder on Sunday that the FBR has placed new checks in processing of refunds under the 'FASTER' system after detection of inadmissible refund payments through Post-Refund-Audits.

FBR Member Inland Revenue Policy stated that the system is working smoothly and processing genuine claims without any problem. The system is continuously working without error and issuing refunds in admissible cases. The FBR has conducted Post-Refund-Audits of the refunds issued under the 'FASTER' system. The Post-Refund-Audits has unearthed some issues in payment of refunds. There were incidences of payments claimed on the basis of fake and flying invoices data.

He said that the FBR has conveyed to the All Pakistan Textile Mills Association that a new check has been placed to ensure payment of refunds to genuine claimants, but discourage fraudulent claims.

"It is government money which would be given to the claimants after necessary verifications", FBR Member said.

Dr Hamid Ateeq Sarwar stated that the refunds filed under the 'FASTER' system are not delayed or blocked but verification is needed to check the authenticity and genuineness of the claims. Initially, we have liberally issued refunds under the "FASTER' system, but now checks are needed to ensure payments to genuine cases.

He stated that the FBR has noticed very high input in claims and high refund claims which were more higher in percentage terms. This promoted the authorities to check the refund claims by placing some new checks. This has also been confirmed during the Post-Refund-Audits of refunds issued under the new system. There would be check and double checks to ensure that refunds are not issued on the basis of fake invoices or flying invoices. There is a possibility that the exporters are not responsible for such inaccurate data, but some where within the supply chain such

Genuine refund claimants have no issues, but the demand is to issue refunds without checks and verifications, which is not possible, he added.

According to the FBR's data released here on Sunday,

FBR has issued Rs. 54 billion of additional refunds this year compared to last year. The total refunds of Rs. 131.01 billion have been released till January 2020 whereas in the last year the refunds of Rs. 76.71 billion were issued.

FBR has also released the refunds detail issued through FASTER system. The total number of refunds claims cases where Annex-H submitted were 6081 with a claimed amount of Rs 37614 million. The FASTER system has processed 4606 cases with a claimed amount of Rs 33364 million showing percentage of 89.99% of total cases. After the processing of such cases, total refunds of Rs 29303 million have been issued showing a percentage of 87.47 % of processed cases. Through the FASTER system, Rs 4061 million were deferred due to want of required data.

Up to February 29th 2020, total returns for Tax Year 2019 were 2,483,866 whereas 373,877 new taxpayers paid taxes in Tax Year 2019.

Federal Board of Revenue has stated that revenue has grown by 17 % with additional revenues of Rs345 billion over last year. In the current Fiscal Year 2019-20, out of target of Rs920 billion for the period from July to January, 2020, the FBR has accumulated Rs. 897.5 billion which shows an increase of 18.1 % compared to the corresponding months in the last year in which Rs 759.1 billion could be collected.

Likewise, the target of sales tax collection till January, 2020 was set as Rs.1039 billion. Out of this target, the net collection of Rs 996.6 billion have been accumulated which showed a growth of 24.7 % compared to the corresponding period in the last year in which Rs 799.1 billion were collected.

The Federal Excise Duty of Rs 145.1 billion was collected against the target of Rs 151 billion from July to January which showed an increase of 23.6 %. The customs duty collection target was set as Rs 399 billion till January, 2020. The FBR managed to collect Rs 373.8 billion compared to Rs 390.6 billion last year in the same months. So far FBR has collected Rs 2407.7 billion against the target of Rs 2509 billion which has increased by 16.7 % compared to last year when Rs 2062.7 billion were collected.

The domestic tax collection has also increased by 28 %. Domestic sales tax has also increased by 41 % during July 2019 to January 2020. The total domestic revenue of Rs 1339.91 billion has been collected compared to last year's 1057.60 billion. Revenue at import stage has grown by 6 % against budgeted target of 36.8 %.

Copyright Business Recorder, 2020

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