According to him, the FBR member informed that the now all pending refunds were put in queue, which would be paid turn by turn or first come first served basis. He responded that as per sales tax rules, refunds were required to be paid within 72 hours.
"If this is true, than the whole concept of withdrawal of zero-rating on export sectors linked with payment of refunds in 72 hours have been destroyed. Prime Minister Imran Khan has promised the exporters that the refunds would be promptly paid to the exporters after imposition of 17 percent sales tax on domestic supplies. This is a major policy shift, if the FBR would not follow the timeframe of 72 hours," he said.
In the last meeting held at the FTO Regional Office in Karachi on FASTER, the Federal Tax Ombudsman (FTO) had directed the FBR that it must take all needful steps and measures to ensure that refund claims of exporters were processed, and paid in 72 hours of submission of claim under the FASTER refund system, the FTO directions added.
The patron-in-chief of the association stated that it was a u-turn in the policy of the FBR. The fact is that the FASTER system rejected the cases of July 2020 onwards, and exporters have to reopen the returns and than resubmit their cases.
Now, exporters claims would be processed on the basis of queue and no payment would be made within the prescribed time period of 72 hours.
Shabbir expressed his shock that how could the FBR unilaterally change its policy on payment of refunds under the FASTER System. This means that the FBR is using "delaying tactics" for payment of sales tax refunds, or the board has no money to pay such refunds.
In the absence of the working capital, the exporters cannot take advantage of the GSP plus. Under sales tax rules, (processing in FASTER module), the claims routed to FASTER module shall be electronically processed. The refund payment order (RPO) of the amount found admissible shall be generated and the same shall be electronically communicated direct to the State Bank of Pakistan, within 72 hours of submission of claim, for onward advice to the respective banks for credit into the notified account of the claimant.
After eight validation checks, including the initial one, if any amount still remains un-cleared, the same shall then be processed under STARR module, it added.