Refund payments: 'Queue' system not being properly followed

After replacement of the FASTER system with "queue" system for refund payments, certain field formations of the Federal Board of Revenue (FBR) are not following queue in processing of sales tax refunds to the exporters under the prime minister's package for the business community.

In this regard, the FBR has issued instructions to all the chief commissioners of the Large Taxpayers' Units (LTUs), Regional Tax Offices (RTOs) and Corporate Regional Tax Offices (CRTOs), here on Wednesday, on the issue of speedy clearance of genuine tax refunds under the prime minister's package for the business community.

Now, the FBR is not talking about payment of refunds in 72 hours under the FASTER system, but the implementation of the queue of exporters.

The FBR has expressed serious concern over method used by certain field formations for processing of sales tax refunds to the exporters under the prime minister's package for business community.

According to the FBR's instructions, certain field formations are processing the claims at their will, and not following the queue available in the refund processing system.

It is again reiterated that all field formations shall strictly follow the queue and process the claims as per law and procedure, the FBR maintained.

The FBR has further requested all the chief commissioners LTUs and RTOs/CRTOs to monitor the refund exercise personally, and ensure that all genuine refunds claims shall be sanctioned as per law, strictly following the queue.

The instructions of the FBR categorically specify that only queue system would be adopted for issuance of speedy sales tax refunds to the exporters. The FBR's claim of payment of refunds within 72 hours under the FASTER system seems to be no more valid.

The FBR has already given a new understanding to the exporters that the sales tax refunds under the FASTER system would be paid on the basis of queue, i.e., first in, first out basis and not within 72 hours.

Now all pending refunds were put in queue, which would be paid turn by turn or first come, first served basis.

Under the government's Rs1,240 billion stimulus package announced by the prime minister on 27th March, the government has released Rs100 billion to the industry under tax refunds on 2nd April 2020.

Advisor to the PM on Finance and Revenue noted that these are unprecedented steps taken by the government to support business and employment in difficult times. The tax refunds released to the industry are the highest in Pakistan's history.

All tax refunds as of 31st March 2020 have now been cleared and the payments made include Rs52 billion in GST refunds to industry (other than export industry), Rs10 billion released to the export industry through the FASTER system and Rs15 billion in duty drawback payments.

On top of these payments the government also released Rs20.5 billion under the DLTL scheme. During the current fiscal year (July-Machr) 2019-2020, the government has so far released Rs163 billion in tax refunds to industry (under GST and income tax), which is a 61.4 percent increase from Rs101 billion released (July-March FY19) last year.