The systemic problems in the FASTER refund system of the Federal Board of Revenue (FBR) have deprived exporters from genuine sales tax refunds to the tune of billions.
This is the crux of the detailed order issued by the FTO against the FBR regarding the FASTER refund payment system.
FTO order said that refusing the requests of complainants for revision of sales tax return by the FBR on account of delay in the presence of its own circulars wherein it was admitted that the FATSER refund system is malfunctioning and condoning delay in some cases is tantamount to maladministration.
The FTO has directed the FBR to ensure that Member Inland Revenue (Operations) would revisit the condonation order and condone the delay and settle the issue of sales tax refund/credit claimed resultantly becoming due, if any, for the relevant tax periods expeditiously.
From July 1, 2019, the sales tax refund procedure was changed and a new system i.e. FASTER was introduced to process and sanction exporter’s refund expeditiously which requires a completely different approach than the previously adopted manual system. The sales tax returns filed under the FASTER were facing different problems as data of previously filed returns were not being matched. The major issue observed is that the refund claimed in the previous return before the introduction of the FATSER was not carried forward for processing in the FASTER. To resolve the issue, the taxpayers applied for condonation of delay in filing of sales tax returns, but the FBR refused to condone the delay in filing of sales tax returns.
As credit of refund could not be claimed unless previous returns/Annexure-H was revised, hence applications were made to the FBR for condoning the delay for revision of returns.
“The FBR did not condone the delay without realizing that delay was not because of any fault of the taxpayers but it was because of systemic problems”, FTO stated.
The root cause of the issue is the malfunctioning of the FASTER system to date, admitted by the FBR by issuing circular 3 of 2020 and STGO 9 of 2023. While giving decisions the FBR has ignored its own circulars wherein FBR itself admitted that the FASTER is malfunctioning that creating problems for the taxpayers. On the other hand, regarding the issue of allowing condonation of filing of revised sales tax returns on the same issue, the Board has already issued condonation letters to other exporters.
The FBR has disallowed condonation of delay in filing of sales tax returns despite recommendations of the Chief Commissioners in the field formations. Hence the observations of the FBR are misconceived and against the reports of the Chief Commissioners/Commissioners. The Chief Commissioners/Commissioners have clearly explained the reasons and have given justifications for the condonation of delay which has not only been ignored but facts have been misreported by the FBR, FTO order added.
Source: Pro Pakistani