The Federal Board of Revenue (FBR) has blocked the payments of some 1170 sales tax refund pay orders (RPOs) particularly relating to textile sector, Business Recorder learnt on Wednesday. According to sources, the move is one of precautionary measures taken by the revenue collecting authority to rule out the possibilities of exploiting newly established Centralised Sales Tax Refund Office (CSTRO) for issuing fake and fraudulent sales tax refunds.
They said that the FBR had allowed Karachi Regional Tax Office (RTO) to start analysing the sales tax refund pay orders falling particularly in textile sector to verify the legitimacy of their refund claims. Accordingly, the Karachi RTO identified some 1170 duplicate sales tax refund pay orders, on which payments had already been made. So, the revenue collecting arm of FBR stopped disposal of these 'sanctioned' sales tax refunds, amounting to Rs 60 million, immediately.
When asked, sources refused to comment, saying that it was premature to say anything about it. However, they added that it had not been ascertained yet whether the issuance of these RPOs was intentional or system error. Therefore, all these 1170 RPOs have now been sent to the audit department for finding root cause of the said blunder, they said.
Sources said that the ministry of finance had restricted the tax departments for releasing those RPOs lying in the national kitty over a year hence. The department has rolled back some 2642 sales tax refund pay orders, which were sanctioned during FY2003 to FY2009 period, to verify the authenticity of their refund claims.
They said that out of total 2642 RPOs, the department has identified 1170 duplicate sales tax refund pay orders falling particularly in textile sector, and added that payments of remaining RPOs would be released soon. Sources, however, added that Karachi RTO, before taking any legal action, would provide maximum opportunities to the claimants of these RPOs to clarify their positions.