The Federal Board of Revenue (FBR) has directed collectors of sales tax to use powers for condonation of time period or extensions under section 74 of the Sales Tax Act, 1990 for disposal of pending sales tax refund applications filed by exporters.
Sources told Business Recorder here on Monday that the FBR has issued instructions to some Directors General of Regional Tax Offices (RTOs) to entertain requests of the registered persons on merit.
The FBR has forwarded the condonation applications to the relevant collectors of sales tax for finalisation of the cases at the level of the regional office. These registered units had earlier made representations to the board for condonation of time period as the board was empowered to do so.
Now, condonation powers have been handed over to the collectors of sales tax, who would be competent authority to process these applications. The purpose of the exercise is to finalise condonation applications being filed by the business community.
According to the boards directive, the FBR has revised procedure for disposal of cases regarding requests of condoning delay under Sales Tax General Order (STGO) 8 of 2009. Through this STGO, the powers to condone delay have been delegated by the FBR to the collectors of sales tax under section 74 of the Sales Tax Act, 1990.
The applications filed by the registered companies should be disposed of on merit, the FBR instructions added. Sources said that the condonation applications mainly related to the refund claims filed under SRO 1204(I)/2007; delay in filing of refund documents under section 66 of the Sales Tax Act and other cases showed that claims have become time barred under proviso of rule 28(1) of the Sales Tax Rules 2006 as the complete supporting documents were provided after expiry of 120 days of the filing of returns and permissions for condonation of time limits were requested by the taxpayers.
Some exporters had also made representation to FBR for condonation of delay in submission of sales tax refund claims filed under section 74 of the Sales Tax Act, due to different genuine problems or reasons. The STGO No 54/2008 was rescinded and the cases already under process in the Board or the RTO/LTU under the said STGO shall be transferred to the concerned collector.
The FBR has empowered the collectors for condonation of time period and extension under section 74 with a view to mitigating the hardships of taxpayers. It would also ensure transparency and fairness in deciding cases of condoning time delays.
Under the existing procedure, the registered person shall apply to the collector having jurisdiction for extension of time period specifying the grounds or reasons of delay. The Collector after considering the grounds or reasons mentioned therein shall examine the case for decision.
The collector may solicit further information/documents from the registered person, or his authorised representative, and the Collector shall decide the matter on merit in each case within thirty days from the receipt of the request in the RTO or LTU.
In case the collector calls for further information, the said period shall be reckoned from the day of receipt of such information provided that such extended period shall not exceed fifteen days in addition to time stipulated and the Collector shall record reasons for approval or rejection of the request of the registered person/applicant.
If there are valid reasons, the Collector may condone delay up to one year beyond the limitation provided under the statutory provisions of Sales Tax Act or rules made thereunder. The cases of limitation under the Federal Excises Act, 2005 or rules made thereunder shall, mutatis mutandis be disposed of under the aforesaid provision, the procedure added.
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