ISLAMABAD: The Federal Board of Revenue (FBR)’s “FASTER” refund payment system took eight to 19 days for processing of refunds, whereas, “STARR” system took 286 to 753 days for processing/payment of sales tax refunds.

An impact study (2023-24) of Fully Automated Sales Tax E-refund (FASTER) system of the Auditor General of Pakistan (AGP) revealed that both the systems are running parallel for processing of refund payments.

The main difference between the two systems is that cases through FASTER are processed centrally for all stages i.e. from verification of claims to upto authorisation of payment at the FBR headquarters.

On the other hand, the processing and sanctioning of refund through STARR system is dealt by the respective field formation. The refunds through the “FASTER” have increased in comparison to refunds through STARR, both in terms of number of claims as well as total claimed amount.

The report added that the “FASTER” took eight to 19 days on average for processing while processing through the “STARR” system varied from 286 to 753 days. Post-processing delays are another hurdle faced by taxpayers while claiming input tax refunds.

Average credit days ranged from 153 to 173 days in STARR, while cases processed through “FASTER” took nine to 29 days, report maintained.

The AGP has recommended that there should be one platform for processing of refund cases. Other sectors not falling within its ambit as of now may also be allowed to file refund claims through “FASTER”.

The tax gap framework of the FBR needs to be reviewed to incorporate refund liabilities and potential refunds. The department needs to address the systemic issue of non-payment of refunds. Risk categorisation of pending refund claims be carried out and payments be prioritised according to risk, the AGP report added.

Copyright Business Recorder, 2024