FBR refunds Rs1bln to Sindh

KARACHI: The Federal Board of Revenue (FBR) has refunded Rs1 billion to the Sindh government account that was recovered as an outstanding amount from the provincial excise and taxation department, sources said on Friday.

The FBR had issued a refund of Rs1 billion to the Excise and Taxation Department of the Sindh government and the amount had been directly credited to the Sindh government non-food account by the Centralized Income Tax Refund Office, FBR Headquarters, Islamabad, the sources said, adding that the amount was related to the tax year 2016.

The refund is part of the refundable amount of Rs5 billion determined by the revenue board on September 29, 2020, through an order under section 161 of the Income Tax Ordinance 2001 for the tax year 2016 after the earlier order was remanded back by the Appellate Tribunal Inland Revenue (ATIR) for de novo proceedings.

The sources said since the proceedings under section 161 in the subsequent years are pending; hence, the remaining amount of the refund would be issued subject to the outcome of the proceedings.

Earlier, the federal and provincial authorities had agreed that the FBR would return the recovered amount of Rs5 billion to the Sindh Excise and Taxation Department. In a protest of recovery made by the FBR in early 2020, the Sindh Excise and Taxation Department had stopped the collection of withholding tax on the registration of new motor vehicles.

However, after the agreement between the federal and the provincial governments, the department resumed the collection of withholding tax on motor vehicles from October 2020.