LAHORE: After a lapse of almost three years, the Federal Board of Revenue (FBR) and Punjab Revenue Authority (PRA) finalised the parameters for implementation of the memorandum of understanding (MoU) signed in 2014 to transfer an outstanding amount of approximately Rs16 billion to the latter under input tax adjustments claims.

PRA has been continuously battling with the FBR to seek its pending claims in the backdrop of annual revenue shortfalls it has been facing for the past three years.

PRA Additional Commissioner (Headquarters) Shahzad Mehmood Gondal told Dawn that the agreed parameters and release of amount by FBR would help achieving the annual sales tax on services target of Rs80bn fixed for fiscal year 2016-17.

He said the authority has collected an amount of Rs43bn in July-Jan 2016-17 as compared to Rs33bn it collected in the same period of 2015-16.

Mr Gondal said a technical committee meeting between the two sides would decide the exact amount of pending claims and transfer modalities which would not only help in clearing ST amount on annual basis but will also help taxpayers in claiming ST refunds and avoid double taxation.

He said the FBR and PRA also reached an understanding for data sharing and streamlining ST on services procedures.

According to parameters, the following is agreed: PRA claims shall be scrutinised by the FBR for necessary verification on priority basis. FBR claims shall also be scrutinised by PRA for necessary verification on priority basis.

For scrutiny and verification of the claims, the following parameters shall be observed: In case of sales tax invoices, out of three fields i.e. (i) invoice No., (ii) invoice date and (iii) invoice amount of tax, at least two shall match and this should be sufficient for the purposes of verification. In case, the invoice number and date match but the tax amount does not match, the lesser of the two amounts shall be considered verified.

In case of import GDs, the Customs Station Code, GD No. and date are material particulars. Of the aforesaid three fields, if the Customs Station Code and GD No. match, this should be sufficient for verification purposes. In case if GD is verified, if the amount in return and that in the GD are different, the lower amount shall be considered verified.

However, in case the Customs Station Code is missing, the GD No. should be verified for matching purposes.

Published in Dawn, February 3rd, 2017