FBR amends refund process to facilitate exporters

ISLAMABAD: The Fede­ral Board of Revenue (FBR) has made changes in the procedure for automati­cally processing refunds for five sectors in what it says is a step taken to facilitate exporters.

The FBR’s Sales Tax General Order No. 09 states that the changes will be applicable from of March 2023 and will facilitate the cash-flow requirements of exporters, especially those operating in the textile sector. The amendments have been introduced through the automated Sales Tax e-Refund System (Faster).

Under the amended process, the value addition check will be 15 per cent both for exports and local supplies for filing of Annex-H for the current tax period.

The total amount of refund paid against the claims filed and processed will not exceed the lower of the two amounts; namely, the amount of input tax actually consumed in goods as exported/supplied at zero-rated rate, or 12pc of exports.

Inadmissible inputs in terms of Section 8 of the Sales Tax Act, 1990 will not be allowed during the processing of refunds through Faster.

Suppliers who have been flagged as having an abnormal tax profile or have been blacklisted will not be processed by Faster. This measure has been introduced in addition to the checks/risk parameters already implemented through Faster.

At the same time, risks have also been applied in the automated refund processing system to keep a check on the system. Faster will defer proportionate input tax refund against export GD under objection, and a logical check will be enabled in the system to cross-match the date of export GD with the date of purchase invoices.