FBR refunds Rs5.5bn to textile exporters

KARACHI: The Federal Board of Revenue (FBR) released around Rs5.5 billion of sales tax refunds to textile exporters under the automated payment system, Chairman FBR Syed Shabbar Zaidi said on Wednesday.

“FBR has released to this date around Rs5.5 billion worth of refunds under fully automated Faster (fully automated sales tax e-refund) system,” FBR Chairman Shabbar Zaidi said in a tweet. “However, the most important feature and the change in paradigm is that such refunds have been issued under fully automated, impersonal, harassment and corruption free system.”

The FBR deployed the automated refund system in August to speed up release refunds to five major export-oriented sectors following withdrawal of zero-rated regime. Previously, Zaidi told a meeting that FBR had so far received claims for sales tax refunds to the tune of Rs10.14 billion pertaining to the period from July to October 2019. Cases amounting to Rs8.02 billion have already been processed for payment and out of which 1,604 cases been accepted for payment, which would be made at the earliest, he added.

Textile businesses provided details through form ‘H’ in sales tax monthly returns to the FBR. The FBR’s data showed that some textile exporters made purchases of raw materials, but they had so far not consumed inputs. So, they did not provide details through form ‘H’.

Officials said the FBR would match information when they would submit the required details through Faster system. Tax authorities would release refunds within 72 hours without any human interaction.

Adviser to Prime Minister on Finance Hafeez Shaikh directed the FBR to take input and suggestions from textile exporters and simplify the form within a week to ease and expedite the processing and payment of sales tax refunds.

Shaikh assured exporters that the government was not interested in keeping their money held up for any length of time and the government was willing to listen to and accommodate any solution or recommendations from the exporters to simplify the ‘H-Form’ and ensure a prompt payment of sales tax refunds to them.

The adviser directed the FBR to expedite the payment of nearly Rs10 billion worth of customs duty drawback to the exporters. Representatives of All Pakistan Textile Mills Association told the finance adviser that they were satisfied with the documentation drive of the government and wanted to process their claims for sales tax refunds through the newly-introduced form H. They said they had formulated their recommendations to further simplify the form in view of certain problems being faced by them in putting in the data.

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