FBR preparing plan for speedy refund of Sales Tax

The Federal Board of Revenue (FBR) is chalking out a comprehensive plan for speedy payment of sales tax refunds to the registered taxpayers. However, it is under consideration to conduct audit of those sales tax refund claims in which manual overruling of STARR objections was raised by sales tax officials for speedy processing of claims.
The specific amount limit would be worked out which would form basis for audit of those returns, which were overruled manually by sales tax officials. Sales tax officials are empowered to manually overrule objections raised by STARR refund automated system. For example, if the refund amount overruled is above Rs 2 million, then the board may ask the collectors to conduct audit of such sales tax claims.
Sources told Business Recorder on Monday that the FBR has directed the sales tax and income tax departments to exchange information on electronic filers of sales tax returns, for accurate payment of refunds. Another proposal is that the collectors may block sales tax refunds in cases where registered persons are not filing sales tax returns, electronically.
"Defiance to e-filing may be basis for non-payment of refund", sources added. Under the plan, the board intends to work out a practical solution for slashing down the huge quantum of pending cases through improving the software. In this connection, Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) have been directed to mutually share information of direct and indirect taxes. There is a need to give access to the refunds system to the taxpayers of both direct and indirect sides.
It has been decided that two-way access to Web-Portal data of both direct and indirect taxes would be made available for prompt utilisation by the tax officials. The FBR has constituted a committee to work out a 'standing operating procedure' (SOP) for exchange of data through Web-Portal. The committee, headed by Nisar Muhammad, comprises Nasiruddin Khan, Chief Executive PRAL, Shafqat Mahmood, Collector, RTO, Lahore and Nadeem Farooqui, Chief Direct Taxes, FBR.
Another committee has been established to examine proposal of RTO, Lahore for liquidation of claims on packing material through the system. The committee comprises Shafqat Mahmood, Collector, RTO, Lahore; Nisar Muhammad Chief ST and FE FBR; Khalid Mahmood-I, Collector LTU, Karachi and Khalid Mahmood-II, Collector Enforcement Karachi.
The FBR has directed collectors to speed up efforts for transparent enforcement of Sales Tax Act 1990 and Federal Excise Act for prompt disposal of genuine refund claims. The Board has also ordered recovery of income tax arrears from the sales tax refunds, being claimed by the tax defaulters.