ISLAMABAD: The Federal Board of Revenue (FBR) has admitted that the flaws in designing of the FASTER system has created problems for the exporters, and resulted in blockage of sales tax refunds. The FBR has issued Circular No 03 of 2020 on Monday to notify the standard procedure for sanctioning of missing amounts stuck in FASTER system due to system glitches.
The FBR has tried to address the issues of past missing refund amount by issuing a new procedure. According to the FBR, in the wake of rollback of zero-rating extended vide SRO 1125 of 2011 issued under sections of the Sales Tax Act, 1990, a Fully Automated Sales Tax e-Refund System (FASTER) was introduced to process and sanction exporters' refunds expeditiously. The FBR has tried to address the issues of past missing refund amount by issuing a new procedure.
Although, the FASTER was rolled out inside the very first quarter of T/Y 2020, yet it continued to malfunction on multiple counts producing suboptimal outcomes. One evidence of FASTER's malfunctioning was that the system would simply miss out on sales tax credits of various taxpayers stalling processing of their refund claims.
This system glitch created problems for exporting taxpayers in terms of uncertainty and stuck-up liquidity, and for the tax administration in terms of credibility deficit.
The matter has been analysed threadbare at the head office, and found out that the problem of missing amounts cropped up due to the very designing of the FASTER module plausibly on three counts, namely; (i) the FASTER was programmed to pick the least of the three opening balances of carry forward of previous month from (a) Sales Tax Return; (b) Annex-H; and (c) the e-RPO generated; (ii) FASTER module's non-synchronization with STRIVE i.e. Serial 7a and 7b of the Sales Tax Return.
(iii) Misapplication of section 8B to certain exporters in FASTER module. These design flaws resulted in wide-going anxiety among the exporters community as large number of missing amounts claimed by them was not being reflected on their e-RPOs after processing by the system.
Thus, the matter having two dimensions, that is, improving the system design for future glitch-free processing of refund claims in FASTER, and devising a mechanism to deal with the past missing amount cases has been resolved, the FBR added.
Under the future processing module, the FBR stated that the problems of opening balance has been overcome by delinking the opening balance of the sales tax return and Annex-H effectively, and linking it to the previous e-RPO alone.
The FBR has issued a new procedure on the process of past missing amount. The concerned chief commissioners would keep a complete log of the pending missing amount of refunds cases in their formations, and ensure their disposal and processing in the shortest possible time as per law and instructions, the FBR added.
Copyright Business Recorder, 2020
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