FBR chief orders payment of Rs126bn in tax refunds, duty rebates

Pakistani traders experienced a boost in liquidity following the Federal Board of Revenue's (FBR) decision to release Rs83 billion in sales tax refunds and Rs43 billion in duty rebates. The Federal Board of Revenue (FBR) Chairman, Rashid Mahmood Langrial, engaged in a meeting with representatives from the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday, as directed by the Prime Minister.

The FPCCI's Senior Vice-President, Saquib Fayyaz Magoon, disclosed the FBR's intentions to settle these refunds and rebates within a two to three month timeframe.

During the meeting, the FPCCI raised concerns about the misuse of the Export Facilitation Scheme (EFS) by exporters who were facing difficulties due to higher valuation rulings on imported raw materials. Langrial addressed these concerns, stating that exports would no longer be halted solely based on the 10 per cent value addition requirement under the EFS.

Instead, the relevant goods declaration (GD) would proceed for export while the value addition, overall cost, and valuation details would be reviewed to determine compliance with the prescribed requirements.

The FBR also agreed to reduce the time for pre-arrival GD filing from its current condition imposed by banks. Magoon informed Langrial that banks often delay payment until the last moment, discouraging pre-arrival GD filing. The FBR's decision to check the FI condition at the out-charge stage will expedite the pre-arrival GD filing and reduce clearance time. Additionally, the FBR agreed to reduce the period for resolving classification disputes from 120 days to 90 days, as requested by the FPCCI.