Revenue authority extends date for deferred sales tax refunds

KARACHI: The Federal Board of Revenue (FBR) has extended the date by one month for settlement of deferred claims for sales tax refund, official sources said on Friday.
The sources said that the tax departments have been advised to settle the defer sales tax refund claims by March 31. Earlier the FBR directed Large Taxpayers Units (LTUs) and Regional Tax Offices (RTOs) to clean the database from such claims by February 28.
Sources at LTU Karachi said that show cause notices had been sent in many cases for production of documents as proof of claims that would expire beyond this month end.
The sources also said that the deadline was extended on the representation received from stakeholders in the textile sector, arguing that they had not been given sufficient time to present evidence.
All Pakistan Textile Mills Association (APTMA) in a letter sent to FBR chairman said that the tax departments were asking documents of transactions made 10 years back, giving only three to four days.
“TU Karachi instead of rerun of deferred sales tax refunds has issued show cause notices to the tax claimants, member mills of APTMA, and giving very limited time to respond,” according to the letter.
The APTMA requested the FBR to issue directives to withdraw show cause notices, and to process deferred refund cases at the earliest.
Earlier, the body of textile mills also urged the FBR for issuing directives to field formations for immediate liquidation of pending sales tax refunds of the claimants on account of current or deferred special excise duty and provincial services refunds.
“Textile mills are in serious liquidity crunch and therefore, liquidation of refunds would help the industry to manage their liquidity issue,” the letter said.