The Federal Board of Revenue (FBR) and the State Bank of Pakistan (SBP) are jointly implementing a new system for electronic issuance of income tax refunds by directly crediting the amount into the exporter’s bank accounts.
In this connection, the FBR has issued a notification for introducing draft amendments in the Income Tax Rules 2002 here on Wednesday.
The FBR has replaced the earlier procedure for electronic payment of income tax refunds with the proposed procedure.
Through SRO.175(I)/2021 issued on Wednesday, the SBP would credit the amount directly to the bank account of the taxpayer.
The FBR has established a Centralized Income Tax Refund Office (CITRO) at the FBR Headquarters for centralized payment of refunds and online transfer to the taxpayers’ bank account. According to the new procedure issued by the FBR, the new procedure shall apply for electronic issuance of refunds under sub-section (4) of section 170 of the Income Tax Ordinance.
From such date to be notified by the Board, after completing all legal formalities the Commissioner shall pass an order under section 170(4) and transmit the order to the CITRO. The same shall be reflected in CITRO in real-time.
The CITRO shall generate electronic advice of approved amount for onwards submission to State Bank of Pakistan (SBP) through dedicated VPN tunnel established between FBR & SBP. The SBP shall credit the amount directly to the account of the taxpayer.
The SBP shall confirm the transfer of the amount to the taxpayer’s account or vice versa electronically to CITRO.
The CITRO shall reconcile the payments issued as per instructions during the month with the electronic scrolls received from the SBP and record the outcome of such reconciliation in the system.
Where any payment instruction is returned back by the SBP due to any reason, the CITRO shall transmit the same to the concerned Commissioner for correction in the payment instruction.
The FBR shall ensure that complete data of refunds issued are made available to the concerned Commissioner electronically, FBR added.