Key Takeaways
- The Federal Board of Revenue has ordered the payment of Rs. 126 billion in pending sales tax refunds.
- The amount includes Rs. 83 billion in sales tax refunds and Rs. 43 billion in duty rebates.
- The payment is to be completed within two to three months.
The Federal Board of Revenue (FBR) has directed the payment of Rs. 126 billion in pending sales tax refunds and duty rebates to businesses, according to Saquib Fayyaz Magoon, Senior Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).
The decision was made following a meeting with FBR Chairman Rashid Mahmood Langrial on Tuesday, which was held under the prime minister’s directive for monthly meetings with Karachi’s business community.
The meeting discussed both deferred and older pending refunds, with the FBR chairman directing that both amounts be cleared within two to three months.
Magoon stated that the pending amount includes approximately Rs. 83 billion in sales tax refunds and Rs. 43 billion in duty rebates.
The meeting also addressed issues faced by exporters under the Export Facilitation Scheme. Magoon clarified that the 10 percent value addition requirement applies to finished goods exports rather than imported industrial raw materials.
He added that export consignments will not be stopped solely because the required value addition is not reflected initially, with the relevant details to be reviewed afterward.
The business community raised concerns over pre arrival goods declarations, with Magoon noting that banks’ funds identification requirement often forces importers to arrange payments at the last moment.
The FBR agreed in principle to check the requirement at the out charge stage to encourage pre arrival filings and reduce clearance times.
FPCCI also called for faster resolution of classification disputes. Magoon said the FBR chairman ordered the period to be reduced from 120 days to 90 days.
The meeting also agreed to address tax exemption issues under the Fifth Schedule, expedite low risk sales tax registrations within one week, and speed up high risk registrations after verification through relevant business associations.
