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Thousands of Exporters Forced to Rely on Manual Processing for Sales Tax Refund Claims

Thousands of exporters who do not fall under the category of five export-oriented sectors cannot process their sales tax refund claims under the FASTER system now.

This means that the exporters who do not fall under the category of five export-oriented sectors will be required to contact field offices for manual processing/verification of their sales tax refund claims.

The FBR has received a letter from the exporters about their apprehensions on the manual processing of the sales tax refund claims.

After more than four years of smooth functioning of FASTER system, the said system has not started rejecting sales tax refund claims of exporters of other than erstwhile zero-rated goods with the following message as reason for rejection, “The FASTER system exclusively handles the sales tax refund claims filed by the exporters of five export-oriented sectors on account of export of goods, as per rule 39B of the Sales Tax Rules, 2006”.

Due to sudden restriction on processing of sales tax refunds of other sectors through FASTER system, exporters will now have to approach tax officers for manual processing of their refund claim, which will exponentially increase taxman-taxpayer intervention.

Meanwhile, the FBR has asked the taxpayers to file non-export-related sales tax refunds, involving multi-tax period (carry forward based refunds), through Expeditious Refund System (ERS) or STARR system up to June 2024.

According to the FBR’s instructions, whereas, registered persons claiming non-export and/or input tax carry-forward based sales tax refunds in terms of rule 34 of the Sales Tax Rules, 2006, are required to file such claims through submission of Form-7A with Sales Tax Return.

The said form is not enabled and registered persons claiming refund under the aforesaid rule are facing difficulties in filing of refund claim through Form STR7A. The non-export claims require scrutiny and cannot be processed in tandem with export-based claims through FASTER.

Now, therefore, in order to remove the difficulty in implementing the provisions of rules and to address refund issues faced by the registered persons, in exercise of powers conferred under section 55 of the Sales Tax Act, 1990, the Board has allowed filing of carry-forward based non-export related refunds through RCPS at tax offices in STARR or through Expeditious Refund System (ERS) up to June 2024 or till the time Form 7A is made available online.

Source: Pro Pakistani