SALES TAX REFUND

If the filing tax payable by a registrant on a tax-exempt transaction made exceeds the amount of tax due to local non-tax provision or export made during that tax period, the estimated value of the input tax shall be returned to the registrant not later than forty-five days of filing a claim for tax refund and thus subject to the conditions. prescribed by the board, by notice in the official Gazette.

PERSONS THAT CAN CLAIM REFUND:
The following registered persons may claim the refund of sales tax paid as input tax:

• Registered manufacturer- cum-exporters and commercial exporters rate the whole or a portion of their supply in accordance with Section 4 of the Act.
• Registered persons who receive taxable inputs in the manufacture of goods that are taxable at the rate of zero per cent of the law or in the notification issued there.
• People who are registered to pay back an additional input tax that cannot be consumed within three months.
• Registered persons receiving taxable inputs used in the export of goods, exempt under local supply law or any notification issued there.
• A refund can also be claimed if the sales tax amount is paid inadvertently or by mistake.
• Refunds may also be claimed if the department pays the amount demanded, but the demand is then reserved by any competent authority, tribunal or court.

FILING OF REFUND CLAIM:
The monthly sales tax return filed by the applicant will be treated as a tax refund claim once all supporting documents include the required data in the form or software received.

No refund request will be received if the applicant fails to submit a claim on the limited software and supporting documentation within 60 days of filing a claim.

REQUIRED SUPPORTIVE DOCUMENTS FOR REFUND CLAIM
The refund claimant must submit to the refund section of the relevant Collectorate, RTO or Large Taxpayer Unit (LTU), in case the refund claim on the computer diskette in the prescribed format or software is as follows:

• Input tax invoices or, if any, a statement of goods for import in which any refund is claimed;
• Summary of Output Tax Invoices and Invoices for Local Zero Rated Objects.
• Statement of Goods for Export (Quadruplicate Copy) Indicates the date or airway bill or Mate receipt number with the railway receipt or postal receipt. In the case of claims of persons other than the manufacturer-cum-exporter of zero-rated goods in a notification issued under section 4 of the Act.
• In the case of imports or exports processed by WeBOC, the submission of the goods declaration is not required and the cases are processed by cross-matching the declarations with the data available in the system.
• A copy of the House and Master Bill of Lading and the Airway Bill, or the receipt of a token, or the verification of goods taken from Pakistan; And
• Statement of taxable inputs, in which the refund is claimed by the claimants other than the manufacturers of the goods.

In addition to the above documents, the commercial exporter must submit a copy of the bank credit advice and duty drawback order issued by the respective bank if issued by the customs authorities.

When a refund claim is filed under Section 66 of the Act, the claimant must submit an application for a refund indicating his name, address, registration number, sales tax refund amount and the reasons for such refund. :

• Input tax invoices in relation to claiming a refund;
• Proof of payment of input tax claimed as a refund; And
• A copy of the relevant order on the basis of the refund claim.

Refunds claimed under Section 66 of the Act will be granted after verification that the adjustment or refund of the input tax has not been previously claimed and that the goods in inventory records are not properly accounted for and that the claimed invoices are certified by CREST (Computerized). Risk – Sales tax based evaluation) system.

For more information, please visit our blogs or FBR official website.

Must Read:
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Who is filer and non-filer?
How to become taxpayer in Pakistan

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