Exportable goods: Domestic sales' documentation becomes hard nut to crack for FBR

Documentation of domestic sales of the exporting goods has become a hard nut to crack for the Federal Board of Revenue (FBR) as it invites the exporters' wrath on the one hand and gives birth to the false claimants of sales tax refunds on the other, said sources.
According to the Board sources, the FBR had estimated to collect around Rs 150 billion on the domestic sales of exportable goods through imposition of 17 percent sales tax against the current collection of Rs 4 billion annually from the export-oriented sectors.
Meanwhile, in order to make exports zero-rated, the FBR was supposed to pay back the duties and taxes in the form of refunds against domestic sales of exportable goods but it is confronting a surge in filing of false claims. The FBR sources pointed out that 50 percent of the refund claims fall under the category of false claims and the Board is in a catch-22 situation to deal with the problem, as it wants to tax the domestic sales on the one hand and keep exports zero-rated on the other.
According to sources, the Board invented a technique of making form-H cumbersome, which is meant for a fast clearance of refund claims. The refund process has been made difficult to the extent that even the genuine claims are being stuck up these days.
A leading tax expert, Shahid Pervaiz Jami, pointed out that filling up the Annexure-H is difficult to the extent that it causes undue delay in the clearance of refunds within the prescribed period of 72 hours. He said the requirement for the mentioning of code headings is one area where exporters face trouble while the import data of the export-oriented units is also not loaded in the Annexure-B of the form automatically to match with the value of the raw material supplies. Furthermore, he noted, there is no provision for the adjustment of 3 percent additional sales tax in case of unregistered buyers which needed to be corrected immediately. Also, there are no measurement standards for the items mentioned under the each HS code, which leads to system glitches. According to him, the period for the filing of Annexure-H is 120 days, which is not sufficient at all. Rule 39F should also be amended to ensure provisional sanctioning of 50 percent of a refund claim. Also, he pointed out that the exporters are incurring heavy cost in terms of the deployment of human resources to deal with intricacies relating to the Annexure-H. The government should understand that exporters cannot be passed it on to their buyers, he asserted.
According to sources, the FBR had come up with the idea of integration of the points of sales of major departmental stores but the whole idea has been put on the backburner with the departure of Syed Shabbar Zaid as Chairman FBR. The Regional Tax Office sources told on the condition of anonymity that the departmental stores and retail outlets listed with the Large Taxpayer Units (LTUs) are the only success stories while those in the corporate and non-corporate zones have not registered themselves with FBR.