Key Takeaways
- The Federal Board of Revenue (FBR) has issued instructions to clear backlogged sales tax refund claims.
- Timelines have been set for each stage of the process, from communication to issuance of Refund Payment Orders.
- A checklist of documents is required from refund claimants to ensure compliance.
The Federal Board of Revenue (FBR) has issued detailed instructions to clear backlogged sales tax refund claims, setting strict timelines for each stage of the process. These measures are aimed at addressing the concerns of taxpayers and refund claimants regarding the prolonged pendency of their claims.
According to the FBR’s instructions, a significant number of refund claims deferred by the FASTER system, after completion of 12 validation checks, have remained pending due to non-submission of requisite documents and delays in subsequent processing.
Under the prescribed procedure, the deferred memo is to be communicated through the FASTER system to the taxpayer and the concerned field office after the 12 validation checks are completed. The concerned field office is required to intimate the taxpayer for submission of the requisite documents within seven days.
In case of non-compliance or partial compliance, an objection memo is to be communicated to the refund claimant, followed by reminders for submission of a reply. If the claimant continues to be non-compliant, proceedings for issuance of a show-cause notice are to be initiated.
The FBR has also prescribed a checklist of documents to be furnished by refund claimants, including the sales tax registration number (STRN), NTN, sales and purchase invoices, import and export Goods Declarations (GDs), tax period, monthly return with annexures, bank account details, sales register, section 73 compliance, authority letter and undertakings, among other documents.
The Receiving/Processing Officer will verify the availability of each document at the time of receipt of the refund file and record any deficiency, if applicable. The FBR clarified that the prescribed timeline will not apply to refund claims pertaining to excess carry-forward amount and input tax carry-forward under Section 8B of the Sales Tax Act, 1990.
The FBR’s instructions direct all Chief Commissioners Inland Revenue (CCIRs) to ensure strict compliance with the prescribed timelines for processing and disposal of deferred refund claims. The measures are aimed at ensuring expeditious disposal of these claims and addressing the concerns raised by taxpayers and refund claimants.
