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FBR asked to release sales tax refunds

FBR asked to release sales tax refunds

KARACHI: Traders have urged Federal Board of Revenue to pay their sales tax refunds pending for the last two years owing to unavailability of electronic link between the provincial sales tax departments and FBR.

Towel Manufacturers’ Association of Pakistan (TMA) Chairman Iftikhar Ahmed Malik and Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) Chairman Amir Amin Kothawala, in their separate statements, asked FBR and Finance Minister Ishaq Dar to make early payment of outstanding refunds.

TMA Chairman Iftikhar Ahmed said that sales tax on services was being collected by Sindh Revenue Board (SRB) and Punjab Revenue Authority (PRA), whereas the exporters have filed their tax returns with FBR.

Under the 18th Amendment the sales tax on services became a provincial subject from 2010, and Sindh took a lead by setting up a separate body SRB. Later, Punjab also formed PRA to collect sales tax on services.

However, with no link between FBR and provincial bodies collecting sales tax, the refund payment or adjustment was not possible and this was depriving exporters from much-needed funds.

Prgmea Amir Amin said that for the last several years the finance ministry had not released funds to pay outstanding refund claims of around Rs40 billion. He said exporters were facing liquidity crunch because of the huge backlog of refunds and were finding it difficult to meet their future export contracts.