FPCCI laments non-payment of refunds against RPOs issued up to April 2017


KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has lamented on non-issuance of refunds despite assurance of the finance minister that Refund Payment Orders (RPOs) issued prior April 2017 will be paid.
Irfan Ahmed Sarwana, Acting President of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) referring to the continuous decline in exports from $ 25 billion in 2014 to less than $ 20 billion in 2017 has attributed it to the high cost of production of our indigenous goods due to variety of reasons including inordinate delay in payment of refund claims to exporters as it makes them suffer from liquidity crunch and therefore, they are compelled to take loan at high mark-up rate to meet their export orders well in time. This was stated by him in his welcome address to Ms. Seema Shakeel, Chief Commissioner, Inland Revenue, Large Taxpayers Unit (LTU), Karachi, during her visit to FPCCI.
The FPCCI Acting President lamented, “Inspite of Finance Minister’s assurance, the refund claims whose RPOs have been issued before April 2017 are not paid as yet”.
The Acting Chief of FPCCI said that when nil Sales Tax Return Filers such as exporters, sole distributors etc., claim their refunds, they as a penalty are mainly served with the audit notices to discourage them. He proposed to dispose-off the audit within a stipulated time frame as over 200,000 of audit cases were lying pending for settlement.
The Acting President of FPCCI referring to the complicated and cumbersome procedure of Sales Tax registration and deregistration due which a large number of applications are lying pending proposed that a traders should be temporarily registered within seven days of filing his application so that he may resume his normal business activities, however, the tax officials may continue to keep their verification process at their end and may revoke such provisionally issued STR certificates if verification report is not favorable.
S.M. Muneer Former Chief Executive (TDAP) and Past President FPCCI said that FBR only knows to collect taxes but does not facilitate the taxpayers. He said that due to high cost of doing business in Pakistan, the industrial sector which provides employment opportunities is gradually depleting which would be resulted in severe law and order situation, inflation etc. He urged the Chief Commissioner LTU to issue exemption certificates within the same day.
Seema Shakeel, Chief Commissioner Inland Revenue (LTU) in her address advised that the taxpayers should resolve their issue directly with tax authorities instead of going for unnecessary litigations as Tax Officials are available to guide taxpayers in resolving their issues. In response to Shaikh Shakeel Ahmed Dhingra’s proposal she said that the facility of alternate dispute resolution is functional and is providing settlement of their disputes, free of cost, to the taxpayers in a short span of time. She elaborated that LTU Karachi which is the main revenue arm of FBR has rupees 52 billion stuck up in court cases. She said that the refunds issuance procedure has been improved in the past few years as evident from the fact that FBR has released a sufficient amount of refunds during the first two months of current fiscal year.
Regarding consulting the concerned trade body before raid on the business premises she said, “It is difficult to apprise the trade body of raids due to confidentiality of the matter’’ She further said the Sales Tax registration was grossly misused for obtaining bogus refunds in the past, however, she appreciated the proposal of granting temporary registration of Sales Tax.
In response to a query from Saquib Fayyaz Magoon, Vice President of FPCCI, the LTU Chief replied that whole stock should be declared by a Taxpayer in his return and should not be hide due to fear of levy of further tax.