Large Taxpayer Unit (LTU) Karachi has assured the textile sector trade bodies that all pending/deferred sales tax refund claims shall be disposed of before February 28, 2015. Sources told Business Recorder here on Thursday that the Chief Commissioner LTU Karachi has communicated the decisions of last meetings of tax authorities with the directors of export houses and trade bodies of textile sector.
As per directions of the FBR Chairman, representatives of trade bodies of textile sector were called and a detailed meeting was held with business community representatives Zubair Motiwala and Jawed Bilwani, Another meeting was also held with Shahid Anwar Tata and Nadeem Abdullah in LTU, Karachi.
During the meetings members/representatives of Trade bodies highlighted issues like non-processing of deterred sales tax refund claims; technical problems in Expeditious Refund System (ERS) System and impact of Section 8B and Sales Tax Withholding Rules on refund claims.
The LTU Karachi has informed the Board that the resolutions have been made and are accordingly proposed to be implemented if deemed appropriate by the FBR: Firstly, regarding the deferred claims it was intimated that all sales tax refund claims shall be disposed before February 28, 2015. The Zonal Commissioners of LTU, Karachi have been directed to clear all pending refund claims with in 30 days and submit no pendency report by February 28, 2015. However, the major concern of APTMA was regarding deferred refunds pending in RTOs for which it is requested that similar instructions may be passed for RTOs.
Secondly, as far as the technical problems in ERS system are concerned, it has been desired by the representatives of trade bodies that a meeting may be held with FBR Member (IT) to discuss technical issues on fortnightly basis. Thirdly, during the meeting representative of trade bodies reported that the condition of payment of 10 percent output every month as per section 8B of Sales lax Act, 1990 is creating financial burden on the genuine taxpayers.
Besides, refund of withholding of sales tax is not allowed by the ERS system to the exporters which creates liquidity crunch for the genuine exporters. Therefore, trade bodies of textile sector requested that manufacturer/cum-exporters may be excluded from the purview of withholding tax regime and section 8B of the Sales Tax Act, 1990. During the meeting it was decided that this is a policy issues which will be sent to the board.