Refund claims: FBR directs completion of processing before 20th

The Federal Board of Revenue (FBR) has directed all the chief commissioners, Inland Revenue, to complete processing of the refunds claims before 20th April 2020 in view of the sensitivity of COVID19 relief package implementation, says a notification available with Business Recorder.

The notification issued by the FBR on 13th of April pointing out that the sales tax refund process required to have been completed by the end of last week but it still remains inconclusive. It further said that the competent authority has desired the completion of this process by the 20th of April and no processing officer shall be allowed any leave until this process is completed, even if extended working hours are required including observance of Saturday & Sunday as working days.

Well-placed sources in the FBR said that regional offices were required to release Rs 100 billion refunds by 11th of April but they have missed the deadline. Prime Minister Imran Khan had assured the business community of releasing refunds immediately under his March 24 economic relief package to provide liquidity during the lockdown period. Meanwhile, the ministry of finance has increased the volume of refunds to Rs157 billion from the earlier announcement of Rs100 billion while the verification pace, against the claims, was dismally low, leading to the lodging of complaints from the business community.

According to the sources, the relief package includes Rs 107 billion under the head of sales tax refunds and Rs 50 billion under the head of income tax refunds from 2014 onwards. Sources from the Corporate Regional Tax Office (CRTO), as well as the Large Taxpayer Unit (LTU), informed that they were targeting only those refund claims that were filed electronically since 2014. The fate of the refund claims filed earlier to 2014 is hanging in the balance. All those claims were submitted manually, which are around Rs170 billion in total, said the sources.

They have further added that the issuance of refunds has been expedited through Fully Automated Sales Tax E-Refund System (FASTER). However, the claims with discrepancies as pointed out by the system in Form-H submissions have been withheld for further verifications, they said.

An official from the CRTO told on the condition of anonymity that verification of income tax claims is quite cumbersome procedure but the management was quite hopeful to meet the deadline of 20th April. He said it was not easy to quantify the income tax refund claims being processed so far and he was unable to share even a rough estimate at this point in time. According to the CRTO sources, system-based verification is being carried out in order to ensure social distancing by the department.