ISLAMABAD: The Federal Board of Revenue (FBR) will electronically communicate the Refund Payment Orders (RPOs) of the pharmaceutical companies, within 72 hours of filing of claims, to the State Bank of Pakistan (SBP) for direct credit of the amount into their bank accounts.

The FBR on Monday issued SRO 383 (1)/2022 to notify the new procedure on the refund to the pharmaceutical sector through amendments to the Sales Tax Rules, 2006.

The procedure shall apply to refund claims for the period commencing from January 15, 2022 onwards, as filed by the registered persons engaged in import or supply of zero rated drugs as registered under the Drugs Act, 1976, or medicaments as classified under Chapter 30 of the First Schedule to the Customs Act, 1969.

The total amount of refund paid against the claims filed and processed under the new procedure shall not exceed the lower of the two amounts, namely, the amount of input tax actually consumed in goods as supplied at zero-rated rate, or the amount as per ceiling, if any, determined by the Board, in terms of percentage of value or amount per unit of the quantity as deemed appropriate.

According to the new procedure, the claims routed to FASTER Pharma module shall be electronically processed. The data in the refund claim shall be scrutinized and verified by the system and the payable refund amount shall be determined on the basis of RMS quality check of input consumed in supplies. The RPO of the amount found admissible shall be generated and the same shall be electronically communicated directly to the State Bank of Pakistan, within 72 hours of submission of claim, for onward advice to the respective banks for credit into the notified account of the claimant.

The part of the refund claim that is not verified or not found admissible shall be subjected to system validation checks every week and RPO shall be generated for the amount found valid during each validation check. After every validation process, the information regarding RPO generated, if any, as well as the objections shall be communicated by the system to the refund claimant and also to the concerned IRS field formation for information. The RPO so generated shall be communicated to the State Bank of Pakistan for payment in the aforesaid manner. After eight validation checks, including the initial one, if any amount still remains un-cleared, the same shall then be processed under STARR module as referred to in Chapter V, the FBR said.

After submission of refund claim, in the aforesaid manner, the same shall be processed by risk management system (RMS).

Based on the parameters in RMS, a refund claim shall be routed to the processing module referred to as fully automated sales tax e-refund pharma (FASTER Pharma). The claims that do not fulfil RMS parameters for processing through FASTER Pharma module shall be routed for processing under Chapter V, the FBR added.

Copyright Business Recorder, 2022