ISLAMABAD: The Centralized Income Tax Refund Office (CITRO) of the Federal Board of Revenue (FBR) will generate electronic advice of approved income tax refund for onwards submission to the State Bank of Pakistan (SBP) for crediting the amount directly to the bank account of the taxpayer.

In this connection, the FBR has issued a notification on Wednesday to implement a new system for electronic issuance of income tax refunds by directly crediting the amount into the bank accounts of taxpayers.

Under the SRO 175(I)/2021 issued by the FBR on Wednesday, the SBP would credit the amount directly to the bank account of the taxpayer.

The FBR has established a CITRO at the FBR Headquarters for centralised payment of refunds and online transfer to the taxpayers' bank account.

According to the new procedure issued by the FBR, the new procedure shall apply for electronic issuance of refunds under sub-section (4) of Section 170 of the Income Tax Ordinance.

From such date to be notified by the board, after completing all legal formalities the Commissioner shall pass an order under Section 170(4) and transmit the order to the CITRO.

The same shall be reflected in the CITRO in real time.

The CITRO shall generate electronic advice of approved amount for onwards submission to the SBP through dedicated VPN tunnel established between the FBR and the SBP.

The SBP shall credit amount directly to the account of the taxpayer.

The SBP shall confirm the transfer of amount to the taxpayers account or vice versa electronically to the CITRO.

The CITRO shall reconcile the payments issued as per instructions during the month with the electronic scrolls received from the SBP and record the outcome of such reconciliation in the system.

Where any payment instruction is returned back by the SBP due to any reason, the CITRO shall transmit the same to the concerned Commissioner for correction in payment instruction.

The FBR shall ensure that complete data of refunds issued is made available to the concerned Commissioner electronically, the FBR added.

Copyright Business Recorder, 2021