KARACHI, Aug 6: The Central Board of Revenue paid Rs3.69 billion sales tax refunds during July 2002 to exporters by all the seven collectorates of sales tax of the country.

According to the official figures, the highest amount of Rs2.70 billion or 73 per cent of total amount went to Karachi based exporters, followed by Faisalabad where exporters received Rs1.13 billion refund.

However, the two sales tax collectorates — East and West of Karachi — sanctioned big shares of Rs1.58 billion and Rs1.12 billion to exporters, respectively.

A high official of the CBR claims that the refund amount far exceeds the collection, which is because of fake and ‘flying invoices’ being widely used by exporters to get sales tax refund.

On the other hand, exporters are of the view that without the connivance of tax officials no exporter could make false or fake refund claims. However, the ultimate loser are genuine exporters, who are deprived of much-needed refund to meet their export contracts.

In order to sort out the issue, Mohammad Ramzan Bhatti, who recently assumed post of member sales tax CBR, has taken up the task of bringing changes in sales tax refund procedures/rules and started consultation with the trade bodies.

In a meeting with exporters on Monday at the Export Promotion Bureau, also attended by the EPB chairman and vice-chairman, Ramzan Bhatti unfolded various measures the CBR is going to take to stop fake and ‘flying invoices’.

He informed the participants that Information Technology would be extensively used not only to facilitate exporters but also to check fake and flying invoices. There will be verification of invoices through computer, and only then refunds would be made, he added.

Ramzan Bhatti said that exporters would now only have to provide one invoice at the final stage of production for claiming sales tax refunds. In the past exporters had to submit invoices at each stage.

Meanwhile, the sales tax collectorate, Multan, sanctioned Rs235 million towards sales tax refund in July, while ST collectorate, Gujranwala, paid Rs216 million, Hyderabad Rs101 million and Peshawar Rs11 million.

Nevertheless, the highest amount of Rs668.4 million was paid to Faisalabad exporters falling under gold category, followed by Karachi exporters of collectorate East at Rs666 million and collectorate of West at Rs337.4 million.

Exporters falling under silver category have been paid Rs30 million and Rs22.7 million by the ST collectorates of Karachi East and West, respectively.