The Federal Board of Revenue (FBR) has directed its field formations to finalise within 45 days the post-refund audit (PRA) report of cases processed through the newly introduced Expeditious Refund System (ERS), Business Recorder learnt on Saturday.
According to sources, the board has recently issued notification in this regard, directing its field formations to accomplish PRA report of those cases processed through ERS within stipulated period of one and half months. They said that the board has stopped all refund processing systems under immense pressure of international lenders and launched ERS without weighing its pros and cons. Therefore, this move is considered to be one of the major precautionary measures to rule out the possibilities of exploiting newly launched ERS for issuing fake and fraudulence sales tax refunds.
They said the FBR, after the restriction imposed by the ministry of finance for releasing Refund Pay Orders (RPOs) lying in the national kitty over a year, has recently allowed the Karachi based tax office to roll back thousands of sales tax refund pay orders to verify the legitimacy of their refund claims.
They said that although the FBR has introduced the said system to dispose of the entire backlog of sales tax refund claims by November 30, 2010 to implement reformed GST from December 2010, the system is presently not only creating liquidity problems for major business sectors but has also become one of the major impediments in the implementation of the reformed GST. Official give obnoxious posture to oblige the directives of the FBR in this connection, saying that the field formations are not capable to conduct PRA of each case processed through ERS.
They said the tax departments are presently lacking workforce so it is quite difficult for them to conduct 100 percent PRA. They said that the tax departments could not verify the veracity of more than 5 to 10 percent refund claims due to insufficient manpower. They said that the authorities concerned have to establish separate PRA wing at each tax office, if they want to substantiate the legitimacy of every refund claims processed through ERS.