To issue lump sum sales tax refund cheques in minimum possible time, the Central Board of Revenue (CBR) has launched a new simplified procedure from October 1 to sanction refund only in 30 days of the submission of documents. The board has also reduced the stages of refund processing from three to one for the benefit of manufacturers-cum-exporters.
The new simplified mechanism has been notified through amendment in the Sales Tax Refund Rules 2002 through an SRO 820 (I)/2004 issued on Thursday.
The CBR officials said that previously the procedure envisaged processing of refund in almost three phases resulting in piecemeal release of refund and exporters had to pursue/provide documents thrice for refund of a tax period.
Now, the manufacturers-cum-exporters would no more required to submit documents thrice as they would get complete refund by submitting documents once to the relevant officials.
The CBR has also issued instructions to all the collectors of sales tax that the past practice of sanctioning refunds in piecemeal stands abolished.
The collectors should ensure smooth implementation of the refund rules and a compliance report be submitted to the board by October 31, 2004.
The CBR has conveyed to the exporters associations and collectors of sales tax that the board has launched the scheme on the repeated demand of traders, especially manufacturers-cum-exporters.
The decision has been taken to promote taxpayer-friendly culture, reduce undue hardship of capital blockade of exporters and simplify procedure for processing and sanction of sales tax refunds of genuine exporters.
FOLLOWING IS THE TEXT OF THE NOTIFICATION ISSUED HERE ON THURSDAY:
"In exercise of the powers conferred by Section 50 of the Sales Tax Act, 1990, read with the first and second provisos to sub-section (1) and sub-section (2) of Section 10 thereof, the Central Board of Revenue is pleased to direct that the following further amendments shall be made in the Sales Tax Refund Rules, 2002, namely:-
In the aforesaid Rules, in rule 7, for sub-rule (2) the following shall be substituted, namely:-
"(2) In case of manufacturer-cum-exporter,
(a) whose exports of same-state goods do not exceed twenty percent of his total exports in preceding twelve tax periods, refund shall be sanctioned to the extent of admissible input tax consumed or to be consumed for the making of taxable supplies, within one month of the submission of supportive documents;
(b) whose exports of same-state goods exceed twenty percent of his total exports in preceding twelve tax periods, refund shall be sanctioned to the extent of admissible input tax consumed or to be consumed for the making of taxable supplies, within one month of the submission of supportive documents; and
(c) who makes zero-rated supplies as well as domestic taxable supplies, may deducted the amount of tax payable on the domestic supplies from the amount of refund due and claim refund only for the balance amount, if any".
2. This notification shall come into force on the 1st October, 2004.