ISLAMABAD: The Federal Board of Revenue (FBR) has rejected the allegations of the pharmaceutical industry that the sales tax refunds of Rs40 billion are pending since January 16, 2022, as the actual claim is less than Rs2 billion.
Addressing a press conference here on Thursday, Pakistan Pharmaceutical Manufacturers Association (PPMA) Chairman Qazi Mansoor Dilawar informed that sales tax refunds of Rs40 billion have been accumulated. So far, no refunds have been issued under the FASTER-Pharma system.
The FBR has promised to pay refunds in 48 hours but no such refunds have been issued. The FBR should clear all refunds on a fast track basis as claimed under the FASTER-Pharma system.
The government should immediately abolish the 17 percent sales tax on the import of raw materials and zero-rate the same, he added.
However, when Business Recorder checked refund data from the FBR, it has been found that six sales tax refund claims of four pharmaceutical manufacturers have been paid through FASTER-Pharm involving an amount of Rs36 million.
Moreover, refunds of Rs1 billion are being processed after the proper filing of Annex-H of the sales tax return form.
The FBR is fully assisting the pharmaceutical companies in an accurate filing of returns and processing of refunds, the FBR sources added.
Dilawar informed the media that the industry wanted refunds on the basis of “purchases” and not consumption based.
When asked about the role of “Issues Resolution Committee” headed by Chief Commissioner-IR, LTO, Karachi, PPMA Chairman stated that the committee had failed to take any decision to facilitate the industry.
The PPMA chairman stated that the shortage of raw materials and input of the drugs and medicines had started in the country due to cash flow problems. In Pakistan, 95 percent of the raw materials have been imported as compared to India where 60-70 percent of the pharma raw materials are locally manufactured.
During the last two years, the prices of the raw materials have been considerably gone up.
The companies do not have the capacity to purchase the raw materials used in the manufacturing of the medicines. Pharmaceutical companies have run out of raw materials, leading to 50 percent shortage of medicines from next month.
He raised question that “are we ready to deal with the new wave of Covid in the absence of essential drugs and medicines?”
The PPMA chairman said the FASTER-Pharma was not working properly and the FBR had now issued a manual form for the pharma companies to file refund claims.
Usman Shaukat from the PPMA informed that the pharmaceutical sector had warned of a crisis-like situation and a severe shortage of lifesaving drugs following the high cost of inputs/raw materials due to 17 percent sales tax and non-payment of sales tax refunds.
The FBR would be responsible for this crisis-like situation in the pharmaceutical sector, as they are not ready to understand the genuine and legal issues of the industry.
PPMA leaders Asad Shujaur Rehman, Dr Tahirul Azam, Zahid Saeed, Khalid Munir Haseeb Khan, Uzair Nagra, Ehteshamul Haq, Yasir Liaquat, and Amir Saleem Butt attended the press conference.
Copyright Business Recorder, 2022
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