The Federal Board of Revenue (FBR) Committee on Inland Revenue (IR) issues met with the Karachi Chamber of Commerce and Industry (KCCI) on Tuesday to discuss the problems faced by the exporters regarding the delay in processing and approval of deferred e-refund cases.
The KCCI team, led by Haroon Farooki, pointed out that the FASTER system, which was introduced in 2023 to expedite the refund process, was disallowing input tax on exported goods without identifying the purpose or use of input tax under the garb of construction material or input tax not related to taxable activity.
They also highlighted the issue of subsequent action, including disallowance of input tax, suspension of registration or criminal proceeding, against the taxpayers who were following the due process and making purchases strictly from active taxpayers against sales tax invoice on payment through banking instrument.
The KCCI team recommended that separate pools for collection and refund should be introduced for each and every sector, and likewise, separate heads for collection and refunds for textile should be made to ensure clarity and transparency in collection and refunds.
The FBR Committee, comprising Mr. Sajid Ullah Siddiqui, CCIR, LTU, Karachi; Dr. Najib Memon, CCIR, CTO, Karachi and Haider Dharejo, CCIR, RTO, Karachi; assured the KCCI that they would settle all the pending claims at their earliest in accordance with law. They also suggested that the list of all the pending deferred claims be provided to the CCIR office for verification.
The FBR Committee observed that the FASTER system needed to be updated with further automation to resolve the cases of deferment. They also suggested to the Member Policy FBR to make some strict policies to control the unscrupulous persons to register in Tax Net. They said that new taxpayer’s data should be critically analyzed for at least three months before granting them registration.
Dr. Najeeb briefed the participants about recent tax fraud cases unearthed by the tax department where huge figures of tax payments were suppressed by using fraudulent input tax. He strongly suggested a policy of “know your vendor” to avoid dealing with such unscrupulous elements. He however agreed to develop an internal return analysis cell to monitor activity of new registered persons to keep proper check on such activity.