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FBR pays Rs 23,625m to exporters as sales tax refund in 2016-17

FBR pays Rs 23,625m to exporters as sales tax refund in 2016-17

ISLAMABAD: The Federal Board of Revenue (FBR) has paid Rs 23,625 million to exporters as sales tax refund in 6,331 cases during the period 2016-17. The FBR has adopted queue based procedure to issue the Release Payment Orders (RPOs).

The gross tax collection included all taxes withheld and collected by the FBR or paid voluntarily by the taxpayers. The refund is then deducted/ subtracted from the gross amount to arrive at the net figure of tax collection.

Soruces told Customs Today that as per announcement made by the Minister for Finance and Revenue in the budget speech the refund payment was to be made in two stages against the RPOs issued between January 2016 and June 2017.  The payment against RPOs involving payment up to Rs1 million has already been made on 15th July, 2017, whereas, the payment against RPOs of higher amount shall be made soon.

The source observed that it was not correct that over Rs150 billion had been accumulated in FBR in sales tax refund. The pendency of total sales tax refund claims as on 30-06-2017 is to the tune of Rs139 billion which is 3.9% of revenue target of Rs3, 521 billion for the year 2016-17.

Moreover, the source added that the pendency as on 1-7-2013 was Rs100 billion which was 5% of revenue target of Rs2,007 billion for the year 2012-13. The comparison shows that since the present government took over in 2013, the refund pendency has decreased as percentage of revenue target.

The reasons for outstanding refunds, the source added that the claims of refunds had not been furnished on the prescribed software (RCPS) along with supportive documents within stipulated time. The claims have been deferred/ withheld due to the legal objections raised by the Sales Tax Automated Refund Repository (STARR).