The one-time 90 days extension granted to exporters by the Federal Board of Revenue (FBR) for submission of Special Excise Duty (SED) refund claims expired on June 30, 2012 and another extension is immediately required due to large number of pending claims.
Sources told Business Recorder here on Saturday that extension of 90 days granted by the Board under general order 1/2012 for submission of special Excise Duty claims expired on June 30, 2012. However, a large number of exporters were unable to submit their claims due to their engagements in other accounting/financial issues by the end of 2011-2012. As the issue directly involves refund to the exporters, the FBR can further extend time period for filing SED claims.
The details of the issue revealed that the SED was introduced vide notification 655(I)/2007 issued in July 2007. The exporters by virtue of the provisions of the notifications were entitled to get refund on SED paid by them on procurement of goods meant for export purpose. However, due to non-availability of refund processing system with FBR, the exporters cannot submit their claims within the prescribed time limit of 120 days after filing tax returns.
The system started operation in the Regional Tax Offices (RTOs) and Large Taxpayers Units (LTUs) in 2011, however all the claims filed prior to availability of electronic system were expired/time-barred technically. The FBR in order to mitigate the hardships and to resolve the genuine demands of the exporters has issued one-time condonation vide Federal Excise General Order 1/2012 dated April 2, 2012 which requires taxpayers to submit their claims within 90 days. The deadline expired just a couple of days ago however according to reports number of genuine refund claimants cannot file their claims due to hectic accounting activities at the end of fiscal year.
The export associations and trade bodies though have appreciated the initiative of general condonation, at the same time they criticised it for putting limitation of 90 days.
When asked to comment former Chairman Pakistan Hosiery Manufactures Association (PHMA), Saleem Parkeh informed that exporters were unaware of any procedure for getting SED refund for more than 3-4 years. There funds were stuck up with FBR on this account as well without any fault at their part. Now, if board has developed the system, tax authorities should not impose restriction on the exporters for availing refunds. The claims pertain to period of over 3-4 years, how it is possible for exporters to leave all their assignments at one side and shift their focus in preparation of the old claims. The deadline of June 30 is also critical in other aspects as this is the closing period for all the companies, he added.
The FBR needs to extend time limit in order to facilitate genuine taxpayers who may suffer due to these technicalities of time limitation. The sources further informed that except the regular refund exporters of textile sector, other sectors of non-traditional exports even remain unaware of any such development.
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