KARACHI, March 11: The Central Board of Revenue (CBR) will make a soft launching of proposed 'Sales Tax Refund Rules' in the first week of next month in the Lahore region prior to adopting them at national level from the next budget 2004-05.
This was stated by Khawaja Tanveer Ahmed, collector, Sales Tax (enforcement) at a meeting with the members of All Pakistan Textile Mills Association (Aptma) here on Thursday.
He said that the new sales tax refund rules has been simplified and automated, and are based on the principles of 'risk management.' However, he stressed upon the Aptma to send its recommendations and suggestion, if any, so that they could be incorporated in the pilot project being launched in Lahore early next month.
Referring to certain points raised by the chairman Aptma Waqar Monnoo, the collector said that the simplified ST refund rules of 2004 will focus on post-payment audit rather than pre-payment which consumes a lot of time and also causes unnecessary delays.
Khawaja Tanveer said that complaints about delays in payment of sales tax refunds would hopefully be resolved once the ST refund rules 2004 are launched. He said that during seven months (July-Jan) of current fiscal about 15,000 refund claims were disposed of by the CBR, which stood 30 per cent higher than last year. The overall refunds made throughout the country were 13 per cent higher than a year ago.
Giving some other details about the new refund rules the collector enforcement who was assisted by deputy collector sales tax refunds Abdul Qadir Memon said that under these rules, claims will be allocated to different channels - Green, Yellow and Red.
Under this system, he said, there would be no pre-sanction scrutiny of claims except for simple cross-matching of documents with the electronic data provided by the claimant.
However, under 'Yellow' channel, pre-sanction desk audit will be conducted, while in case of the 'Red' channel, proper audit and verification of payment will be conducted before sanctioning the refund.
Of Course, 'green' and 'yellow' channel claims will also be subjected to post-sanction audit on random cum risk assessment basis. Thus, exporters with a good profile will get their sales tax refund swiftly while others would be subjected to scrutiny or audit commensurate with their profile.
Khawaja Tanveer Ahmed said that preparation of parameters for profiling of exporters is in hand. Based on these parameters, the sales tax computer system will itself allocate claims to 'green,' 'yellow' or 'red' channels without intervention by the sales tax officers.
The new refund rules provide for full payment of claim amount in case of manufacturer-cum-exporters, instead of present system of many part-payments. Under new rules most of the verifications, calculations and processing would be completed through computer.
The existing software called STARR will be enhanced with the introduction of 'STREAMS' (Sales Tax Risk Evaluation and Management System). This would reduce the discretion and interference of staff. This procedure would be the final step to relieve the difficulties faced by good exporters, he added.
The collector enforcement said that sales tax refund rules would be circulated among FPCCI and chambers and associations for suggestions. This is a part of CBR's new policy of inter-active dialogue before introducing fundamental changes.