Federal Tax Ombudsman (FTO) Dr Muhammad Shoiab Suddle has given deadline of September 30, to the Federal Board of Revenue (FBR) for liquidating all pending income tax, sales tax and federal excise duty (FED) refund claims filed prior to December 31, 2011.
Sources told Business Recorder here on Monday that the FBR Chairman had received a letter from the FTO Secretariat Islamabad on the issue of pending refund claims.
FTO Office has further directed the tax authorities to submit information about the pendency position of the refund as on June 30, to ascertain the actual amount of unpaid refunds of sales tax, income tax and FED.
According to the FTO Office, FTO seeks information with regard to pendency position of refund claims as on June 30, 2012. The FTO has further directed the FBR that all pending claims pertaining to the period prior to December 31, 2011 shall have to be liquidated latest by September 30, 2012. FBR Chairman is required to take action accordingly under intimation to the FTO Secretariat, it added.
In the past, FTO Office had taken suo moto notice under Section 9(1) of the FTO Ordinance, 2000 that Revenue Division/ FBR had attempted to show higher than actual/ real collection of revenue during financial year 2010-2011 by unlawful measures including withholding of huge amounts of taxpayers refunds and borrowing Rs 43.51 billion from large taxpayers during June, 2011, on the promise of return of the amount after few days.
The allegations were referred for reply to the Secretary Revenue Division, vide FTO Secretariat notice of even number dated August 17, 2011. The Revenue Division/ FBR replied vide letters No 1(962)TO-11/2011 dated October 10, No 5(33)/R-Jud/2011 dated February 16, 2012 the FBR neither issued any instructions for withholding of refunds nor for money lending by large taxpayers to show higher than real collection of revenue. The departmental representative also vehemently refuted allegation of money lending by the large taxpayers as reported by the press.
The FTO Office said further investigation had revealed that an amount of Rs 143,875.88 million of taxpayers refund/ drawbacks was held up on June 30, 2011 as against Rs 79,248.90 million on June 30, 2010 and Rs 53,252.35 million on June 30, 2009. The net recovery collection for 2010-2011 was jacked up by withholding refunds/ drawbacks and attempt was also made by the Revenue Division/ FBR to show higher than real/ actual net collection of revenue by borrowing huge amount of money from large taxpayers, which failed due to refusal of State Bank of Pakistan to reflect the borrowed amount of money deposited in July as collection of revenue in Financial Year 2010-11, FTO added. In a recent development of the case, the FTO has further directed the FBR to further submit report about pending refunds up to June 30, 2012.