The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to immediately process missing amounts and deferred sales tax refund of Rs. 408.782 million filed by M/s GlaxoSmithKline Pakistan Limited.
The FTO issued an order against the FBR on Monday. The complainant, GlaxoSmithKline Pakistan Limited, filed sales tax refund claims for the tax periods from February 2022 to June 2022 through the FASTER PHARMA module.
The refund claim under the “FASTER Pharma” module is required to be processed within 72 hours of submission of a claim, for onward advice to the respective bank for credit into the notified account of the claimant under the Sales Tax Rules 2006.
The FTO’s order revealed that the non-processing of missing amounts and deferred sales tax refund for tax periods of February 2022 to June 2022 within the prescribed period of seventy-two hours of submission of claim in terms of Rule 39L of the Sales Tax Rules 2006 was tantamount to maladministration.
The FBR should direct the Chief (Refunds/CSTRO) to ensure linking the missing refund amounting to Rs 408.782 million with the respective refund claims in terms of Circular No.03 of 2020 dated 07-12-2020 for further processing on merit in accordance with the law.
The Commissioner, Zone-Ill, LTO Karachi should process the deferred sales tax refund claims for tax periods of February 2022 to June 2022 amounting to Rs. 756.736 million through STARR on merit and in accordance with Chapter V (REFUND)’ of Sales Tax Rule 2006 read with Circular 01 of 2020 dated 08.04.2020 for issuance of RPOs on its merit.
The complainant filed sales tax refund claims for tax periods of February 2022 to June 2022 through the FASTER Pharma module amounting to Rs. 2,281.254 million. The computerized module processed and sanctioned a refund amounting to Rs. 1,115.736 million and a deferred sales tax refund to the tune of Rs. 756.736 million.
The balance amount of Rs 408.782 million was missed by the FASTER and was marked as carry forward though no such amount was available in the return from February 2022 to June 2022.
In short, both sides agree that there has been a short payment/missing refund amount of Rs 408.782 million. Now the only issue is whether this missing amount is required to be processed through Circular No. 1 of 2020 by way of rollback of claims or through Circular No. 3 of 2020 by simple insertion of the missing amount.
Therefore, it would be a very massive painful rigmarole, unfair and great injustice to the complainant if he is required to be processed through Circular No. 1 of 2020 and pay back the sanctioned amount of Rs. 1.116 billion to roll back the refund claims for further processing to obtain the missing amount of Rs. 408.782 million especially when both the complainant and the FBR agree on short payment of refund, FTO added.