Central Board of Revenue Chairman Abdullah Yusuf has ordered full-fledged investigation into the flaws of computerised 'risk-based refund analysis system', which is creating problems for exporters in claiming sales tax refund.
Recently, collectors of sales tax had brought to the notice of Board that the 'Sales Tax Automated Refund Repository' computer system (Starr) and "'isk-based analysis system' were presenting different data for the same refund applicant, resulting in blockage of claims.
Therefore, the CBR Chairman has directed the Member Audit Abdur Razzaq to probe the matter and rectify the errors with the help of collectors of sales tax.
Member Audit has issued instructions to field formations to probe and remove flaws in four areas of the sales tax refund system.
First, identify each weakness/problem in the 'risk-based analysis system' of the exporters. Secondly, the collectors would report the financial implications due to weaknesses in the system, which is causing delays in issuance of refund and creating complexity/confusion among the collectors.
Thirdly, the collectors have also been asked to propose recommendations for corrective measures to improve the system.
Four, the collectors should suggest measures to expedite refund claims.
Interestingly, the directive of Member Audit has failed to inform the collectors about the actual issue raised by the collector of sales tax and federal excise, Lahore Muhammad Nazim Saleem. The collector had sought clarification from the CBR regarding processing of refund claims under the Starr and 'database risk analysis system'.
The collector's letter had given a detailed report on the ambiguities in the analysis system. It elaborated that the collectorate has started issuance of refund after carrying out analysis of the exporter data available with the system along with checks by the Starr. The processing of refund claims under the 'risk-based system' had created many difficulties in the processing of the claims. The collectors were unclear whether to issue refund or not in cases where the system makes unnecessary objections.
Responding to ambiguities raised in the refund processing system, the Board has issued instructions to PRAL, Chief of Starr, Lahore and collectors of sales tax and federal excise, Lahore and Faisalabad to investigate both these systems and submit their reports.
Now, it seems that there is lack of co-ordination between the CBR Audit Wing and Sales Tax Department, which is clearly evident from the Member Audit's instructions that he does not know about the communications already taken place between the Sales Tax Wing and the collectors of sales tax.
The Member Audit instructions have failed to refer to the letter of collector of sales tax and federal excise, Lahore, and subsequent action taken by the Board. Only sketchy directive has been issued to the regional collectors without disclosing the details about the issue in question, sources added.
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