Deferred sales tax refund claims: Exporters paying close attention to Razak's FBR visit

Exporters are confident that Abdul Razak Dawood, advisor to the prime minister on commerce, will take up the issue of deferred sales tax refund claims with the tax authorities on Monday (today), during his visit to the Federal Board of Revenue (FBR).

Sources said that the FBR was not processing deferred sales tax refund claims and was not communicating objections to the exporters.

Therefore, the deferred claims are still pending and need to be processed as top most priority.

Shabbir Ahmed, patron in chief, Pakistan Bedwear Exporters Association told Business recorder that it was a very good step by Razak Dawood, who would be visiting the FBR House on Monday to get up to date information about the payment of refunds and Customs duty drawback to the exporters, as well as the income tax refunds.

Approximately 30 percent of the total refund claims have been deferred by the FBR without assigning any reason to the exporters.

These deferred claims are pending since 2009, which need to be processed by assigning specified reasons of deferment to the exporters.

Most of the exporters are clueless about the status of deferred amounts, Ahmed maintained.

There is a need to develop an SOP for immediate processing of deferred claims, and sanctioning of the admissible claims within 72 hours, he said.

So far, nothing has been done by the FBR to tackle the issue of the deferred claims.

The FBR should inform the exact objection to the exporter, which forms the basis for deferment of the refund claims.

Referring to the Federal Tax Ombudsman (FTO) meeting with the exporters in Karachi, he stated that the FTO had directed the FBR that the association would examine cases of deferred amounts, where the claimants had either filed wrong declarations in the ST&FE monthly returns and Annex-H, and had recommended cases for roll back.

The FBR will also work on the upgraded module to accommodate claimants, where deferred amounts can be processed without roll back, the FTO's directions added.

If any taxpayer is involved in presenting wrong invoices, he must be dealt with strictly under the law and penalty/default surcharge may be imposed to curb this practice, but deferred claim where the exporters can submit requisite documents must be processed, he said.

"We would like to point out to the advisor to inquire why the FBR has started the queue-system of refunds in spite of the faster refunds rule of 72 hours, which was in place? Moreover, we would also request the advisor to inquire why refunds are deferred in spite they are qualified for the refunds. There is no working being done by the FBR in the new cases from July 2019 till date, and also the old deferred refunds, which are pending before June 2019 and also for the past 10 years.

Exporters have received some of the refunds after the intervention of Prime Minister Imran Khan, but if this had been paid before, it would have really helped the exporters and the present issues, which the government and exporters were facing now, would have been avoided.

The exporters have to pay their workers, staff and their suppliers. Exporters once again requested the advisor to press the FBR to process the pending deferred refund cases urgently.

The exporters are facing heavy liquidity problems as the exports have stopped due to the lockdown in the country and they have to pay salaries and be prepared for gearing up the exports again when the current crisis ends, patron in chief, Pakistan Bedwear Exporters Association added.