The Federal Board of Revenue (FBR) has decided to exclude steel sector from Expeditious Refund System (ERS) to check payment of bogus sales tax refund claims under the speedy system. Sources told Business Recorder here on Thursday that the FBR has directed FBR Member Inland Revenue and Pakistan Revenue Automation Limited (PRAL) to immediately exclude steel sector from the ERS.
The ERS is mainly applicable for payment of speedy refunds to the manufacturers-cum-exporters. In case of steel sector, the sales tax refund is obtained by the steel sector on export of iron and steel rods to Afghanistan. The construction industry of Afghanistan imports cement and iron/steel items from Pakistan. Due to discrepancies in the sales tax refunds of the steel sector, the Board would not process the refund claims under the ERS.
Sources said that the claimants of refunds are not required to submit documents including invoices, credit notes, debit notes, goods declarations, bank credit advises, etc, for obtaining sales tax refund using Electronic Refund Claim (ERC) under ERS. The applicant should be manufacturer-cum-exporter registered in RTO. The registered person should be ''active taxpayer'' and the amount of refund claim should also be claimed in the corresponding Sales Tax/FE Return. Moreover, the registered person should be registered as manufacturer-cum-exporter for refund claim period, sources said.
According to the qualification criteria under ERS, the refund should be claimed only to the extent of stock consumed. Refund claim amount has not been adjusted/claimed earlier. In case an ERC qualifies for expeditious payment of refund, then the respective tax office shall be advised by e-mail and a system-approved Refund Payment Order (RPO) shall be placed in the Inbox of the treasury officer of the RTO for issuance of cheque to the registered person. Simultaneously the refund claim shall be forwarded electronically to the concerned audit division of tax office for post refund audit, procedure added.
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