Refund claims hit by inconsistency

There is an inconsistency of Rs 90 billion between the pending refund claims cited by Minister of State for Finance Rana Muhammad Afzal Khan and those claimed by the exporters. In a recent statement, Minister of State for Finance stated that there are approximately Rs 160 billion pending refund claims of exporters which will be released soon to support the value-added sector. He further stated that serious efforts are underway to clear all refund pay orders (RPOs) in one go.
However, exporters, including textile associations, have contested Rana Afzal''s claim and stated that their pending refund claims are around Rs 250 billion and not Rs 160 billion. Exporters further contended that customs rebate claims of approximately Rs 50 billion are pending with FBR, whereas sales tax refund claims including deferred claims total approximately Rs 200 billion.
Senior FBR officials told Business Recorder that around Rs 130 billion sales tax refund claims including deferred claims of exporters are pending with the FBR. "If we include income tax refund claims and customs duty rebate, the pending amount of claims comes to around Rs 200 billion", they acknowledged.
When specifically asked about the time period of payment of these pending claims, sources said that so far no specific date has been finalized for payment of claims in one go, but all claims would be cleared through an electronic system. Under direct credit facility, the amount would be transferred into the accounts of taxpayers. FBR officials added that the FBR has paid sales tax refunds of Rs 26.43 billion of ROPs up to April 2017 through the electronic system; and cleared sales tax refunds of over Rs 15 billion of ROPs issued up to August 2017. In January 2018, the FBR paid 33 percent more as refund/rebate compared to the previous year.
A senior official of Ministry of Commerce and Textile revealed that pending amount includes Rs 40 billion sales tax refund claims, Rs 10 billion customs duty rebate and Rs 5 billion Duty Drawback of Local Taxes (DLTL) and Rs 20 billion is yet to be paid to the exporters under the Prime Minister''s incentive package for exporters. These are verified refund claims, but if the deferred claims are included in the pending amount, total figure of pending refund claims would be around Rs 150 billion. He further said that the government has so far released Rs 16.5 billion out of the Rs 46 billion PM export incentive package announced in October.