Federal Board of Revenue has disbursed Rs 3.8 billion on account of sales tax refund during the period from July 2013 to April 2014 as against Rs 1.8 billion disbursed during the first ten months of previous fiscal year.
This was revealed by FBR Chairman Tariq Bajwa while assuring the exporters to accelerate the refund system and forwarded necessary directions for speedy processing of refund claims. He was talking to a delegation of Pakistan Textile Exporters Association (PTEA) led by its Chairman Sheikh Ilyas Mahmood.
Apprising the FBR Chairman of the problems of textile exporters, Sheikh Ilyas Mahmood said the tax department is issuing recovery notices to exporters demanding tax recovery on account of refunds received against the supplies of blacklisted suppliers. He explained that at the time of supplies, registered persons were not included in the list of suspected units and were active during the relevant tax period and goods purchased from these suppliers were duly exported and refund was sanctioned after thorough scrutiny of the refund claim.
He further informed about the severe liquidity crunch as 30 to 35 percent working capital of textile exporters has been stuck in sales tax, customs rebate and federal excise duty refund regimes. If that amounts are released, exporters can deploy that capital towards expanding their businesses, which in turn will help Pakistan’s export earnings grow, he explained.
While talking to delegation Tariq Bajwa said, he was in agreement that if at the time of supplies, registered persons were not included in the list of suspected unit and were active and recovery of refunds received is not justified. He directed the authorities concerned to withdraw such recovery notices with immediate effect.
On the issue of stuck amounts, he assured to accelerate the refund system and forwarded necessary directions to Regional Tax Office for speedy issuance of notices for sales tax claims u/s 66 and deferred. He asked the exporters to help FBR with proper documentation to expand the tax net.