The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to process all cases of textile companies received by the Export-Oriented Sector Registration Cell (ESRC) from the trade bodies and associations on fast track basis for granting concessionary tariff regime of electricity, gas, and RLNG.
The FTO issued an order here on Monday in favor of the All Pakistan Textile Mills Association (APTMA).
According to the FTO order, the FBR is directed to ensure that all cases, received by the ESRC from the trade/associations are processed on a fast track, conducting proceedings on day to day basis and cases of all genuine exporters (as per FBR record) are immediately forwarded to the Ministry of Commerce.
The FBR’s ESRC should strictly confine itself to the dictates of circular number 4 of 2020 and process the cases without any delay, forestalling any irretrievable loss to the exporters.
The FBR is also directed to ensure that the discrepancies, if any, observed by the ESCR during the processing may be shared with the concerned field formations without delaying the process.
The FBR is also directed to ensure that instead of indulging in time-consuming correspondence, ESRC must hold frequent consultative sessions and meetings with concerned trade associations for expeditious processing, FTO directions added.
According to the FTO order, the Economic Coordination Committee (ECC) had directed the FBR, the Ministry of Commerce, and other stakeholders to devise a standard operating procedure (SOP) for the enrolment of registered persons under the export-oriented sectors (erstwhile zero-rated sectors) to qualify concessionary regime of electricity, RLNG and gas tariff.
Under the scheme, a designated cell, i.e., the Export-Oriented Sectors Registration Cell (ESRC), was established and mandated to examine the particulars and recommendations of the respective Associations and counter-verify particulars of the taxpayers including declarations in the registration profile, etc.
The said circular 4 of 2020 though provides that discrepancies spotted by the ESRC during scrutiny/ verification of data forwarded by concerned trade associations with the registration profile maintained by FBR, will be referred to field formation for the ground check, report, and recommendation, yet the complainant alleges that instead of expeditious processing of the claims of export concerns ESRC has indulged into an unauthorized exercise, which is tantamount to audit, the FTO said.
It has been observed that in a number of cases after the removal of objections raised by the ESRC the cases were recommended for concessionary tariff but the delay caused in such cases took a heavy toll on exporters as they had to suffer the burden of standard tariff during the period of pendency of case at ESRC.
Understandably this regime is exposed to the threats of misstatements, misdeclarations, and even tax fraud but such risks must not overshadow the underlying priority of the ECC, i.e., expeditious processing of genuine cases. Cases suffering from some procedural lapses and other discrepancies in return profile need to be shared with concerned field formations having legal jurisdiction and powers to address the said hazards through legal ways and means, the FTO order said.
The export sector being the lifeline for Pakistan’s economy merits the highest attention, compassion, and care. By no means should it be hostage to any delay due to routine official rigmarole, it said.
During the hearings, the complainants vehemently reiterated their allegations and shared details of the delay caused by the ESRC in forwarding their cases to the Ministry of Commerce, Government of Pakistan. They also agitated that during the time taken by ESRC they have to pay standard tariff which not only put an extra burden on exporters but it reduces their competitiveness in the market, as well.
The findings of the FTO revealed that the instant case facts clearly indicate that while processing the case of the complainant, ESRC has failed to conduct the proceedings in the spirit envisaged by ECC.
The ESRC, instead of forwarding the case to the Ministry of Commerce, had referred the case of the complainant to the Large Taxpayers Officer (LTO) Karachi on 19th April 2022 and till 8th June 2022, there was an unabated delay. Ultimately this case was forwarded onwards on 22nd June 2022 only after the intervention of this office.
Such a delay, inattention, and ineptitude is tantamount to maladministration in terms of section 2(3) (ii) of the FTO Ordinance, 2000.