The Federal Board of Revenue (FBR) will electronically communicate the refund payment orders (RPOs) of the pharmaceutical companies to the State Bank of Pakistan (SBP), within 72 hours, for direct credit of the sales tax refund amount into their bank accounts.
The FBR on Monday issued S.R.O. 383 (1)/2022 to notify the procedure on the refund to the pharmaceutical sector through amendments in the Sales Tax Rules, 2006.
The procedure shall apply to refund claims for the period commencing from January 15, 2022, onwards, as filed by the registered persons engaged in import or supply of zero-rated drugs as registered under the Drugs Act, 1976, or medicaments as classified under Chapter 30 of the First Schedule to the Customs Act, 1969.
The total amount of refund paid against the claims filed and processed under this Chapter shall not exceed the lower of the two amounts, namely, the amount of input tax actually consumed in goods as supplied at a zero-rated rate, or the amount as per ceiling, if any, determined by the Board, in terms of percentage of value or amount per unit of the quantity as deemed appropriate.
According to the new procedure, the claims routed to the FASTER Pharma module shall be electronically processed. The data in the refund claim shall be scrutinized and verified by the system and the payable refund amount shall be determined on the basis of RMS quality check of input consumed in supplies.
The refund payment order (RPO) of the amount found admissible shall be generated and the same shall be electronically communicated directly to the State Bank of Pakistan, within seventy-two hours of submission of the claim, for onward advice to the respective banks for credit into the notified account of the claimant.
The part of the refund claim that is not verified or not found admissible shall be subjected to system validation checks every week and RPO shall be generated for the amount found valid during each validation check. After every validation process, the information regarding RPO generated, if any, as well as the objections, shall be communicated by the system to the refund claimant and also to the concerned IRS field formation for information.
The RPO so generated shall be communicated to the State Bank of Pakistan for payment in an aforesaid manner. After eight validation checks, including the initial one, if any amount still remains un-cleared, the same shall then be processed under the STARR module as referred to in Chapter V., FBR said.
The FBR added that after submission of the refund claim, in an aforesaid manner, the same shall be processed by the risk management system (RMS). Based on the parameters in RMS, a refund claim shall be routed to the processing module referred to as fully automated sales tax e-refund pharma (FASTER Pharma). The claims that do not fulfill RMS parameters for processing through the FASTER Pharma module shall be routed for processing under Chapter V, FBR added.