The Federal Board of Revenue (FBR) has so far sanctioned Rs56 billion sales tax refunds through the FASTER (Fully Automated Sales Tax e-Refund) system since July 2019 against the claimed amount of Rs59 billion, reflecting 95 percent payments.
The FBR Wednesday released the information about refund claims sanctioned through FASTER developed for quick processing of refunds due to exporters. The FBR data revealed that the 7,965 cases were filed since July 2019, claiming refunds under the FASTER system.
After payment of verified amount, 954 claims are still under process. The deferred amount of claims now stood at around Rs5 billion. At least 100-130 monthly claims have been filed through FASTER since July 2019.
In January 2020, the refund claims filed under the FASTER reduced to 548 cases. Since July 2019, refund claims amounting to Rs59 billion have been filed and the FBR has sanctioned Rs56 billion, which comes to around 95 percent of the claimed amount.
During March 2020, the FBR has sanctioned refunds of Rs25 billion approximately to exporters. The FBR said that the FASTER was a fully automated system, which used a risk management system for processing sales tax refunds without human interference.
The FASTER is operational for the tax periods July and onwards. The FBR strives to make timely payment of refunds to exporters so that they don't face any liquidity issue.
Meanwhile, Javed Iqbal Qazi, chairman Pakistan Tax Advisors Association (PTAA) has appealed to the prime minister to direct the FBR for adopting some policy for release of pending income tax refunds.
"We understand that the federal government has approved a specific fund for issuance of refunds to the exporters but no such approval/allocation has been sanctioned for income tax refunds," he said.
It is also requested that pending income tax refunds for the past years may be issued by the FBR, so that the businessmen can be able to improve their cash flow and could be able to pay wages/salaries to their employees as well as meet their liabilities.
The prime minister should also allocate specific fund for clearance of pending income tax refunds, whereas the FBR be strictly advised not to apply the provisions of Section 122(5A) of the Income Tax Ordinance, 2001 in any case, Qazi added.