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Mounting ST refunds stoking up industry’s worries

Mounting ST refunds stoking up industry’s worries

LAHORE: The pending sales tax refunds of few export companies have amounted to Rs1 billion in 2013-14 while the business community has reiterated its stance to raise voice for  early release of refunds at all forums including Federal Board of revenue (FBR).

As per details, leading exporters have expressed their concern over the mounting refund claims on daily basis despite submission all necessary documents without any discrepancy to Computerised Risk-Based Evaluation of Sales Tax (CREST). The exporters are of the view that the pending sales tax refunds mainly encompassed genuine and admissible refunds blocked by the FBR.

Meanwhile, Abrar Ahmed, Head of Sales Tax Refund Committee, Lahore Chamber of Commerce and Industry (LCCI), said that the volume of sales tax refunds was more as compared to that anticipated by the tax department. The accumulated sales tax refund of only few companies has crossed the figure of Rs1 billion. It is being planned to highlight the issue at all relevant forums to ensure clearance of pending refunds claims at the earliest to run the business smoothly, he added.

A number of exporters have also approached the said sales tax refund committee with the complaints of refund blockage, creating liquidity crunch for major export companies. He was of the view that a huge amount or working capital of businesses had been stuck due to non-payment of sales refund policy of the government. In the absence of a uniform policy, it is yet not clear that how payment of refund claims are prioritised. He questioned that it was beyond comprehension that how the government could expect the industry to survive without having conducive business environment as liquidity crunch had forced many companies to reduce production rendering thousands of employees jobless.

One of the affectee told the sales tax committee that even after the High Court directives, the FBR is yet to release refund, and the companies are unable to pay salaries to employees for last few months. Abrar Ahmed feared that of the phenomenon continued if the situation for the industry would go worse from bad.