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Sunday May 19, 2024

FBR issues Rs20bn sales tax refund claims

The FBR has been fulfilling the IMF requirements on materialising the quarterly envisaged revenue collection target as well as issuing sales tax refunds

By Mehtab Haider
April 02, 2024
Image of the FBRs building in Islamabad. — X/@FBRSpokesperson/File
Image of the FBR's building in Islamabad. — X/@FBRSpokesperson/File

ISLAMABAD: The Federal Board of Revenue (FBR) has issued all sales tax refunds claims of exporters to the tune of Rs20 billion, which were created prior to March 21, 2024.

“The FBR issues all sales tax refund claims of exporters which were created prior to March 21, 2024,” said a Board statement, issued on Monday.

The claims of GST refunds have always remained a tricky issue as both sides possessed divergent views. Exporters usually claim that their refunds remain stuck up, creating liquidity crunch for them.

On other hand, there is a dire issue of fake/flying invoices ranging up to Rs3,000 billion. There is also need to ensure that export proceeds materialised after which the refunds amount should be cleared. The proceeds of exports need to be streamlined and reconciled before issuing refunds to exporters.

The FBR has been fulfilling the IMF requirements on materialising the quarterly envisaged revenue collection target as well as issuing sales tax refunds. Now, after assuming the charge by Prime Minister Shehbaz Sharif, the FBR had been receiving instructions to issue pending refunds. The FBR had already cleared Rs65 billion and now another amount of Rs20 billion was cleared.

Amid issuing refunds claims in the recent weeks, the FBR materialised its monthly target of March 2024 by clinching the target of Rs879 billion. It was expectation of the FBR that they might exceed target of March 2024 with a margin of Rs20-25 billion, so that the target of last and fourth quarter (April-June) could be materialised easily. But it did not happen.

Now the FBR would have to fetch Rs2,705 billion in the last quarter of the current fiscal year for achieving the desired annual target of Rs9,415 billion on June 30, 2024. The IMF and the FBR have made readjustments in monthly

targets of the last quarter and the major chunk of the revenue collection target was envisaged for June 2024.