Fawad Ijaz Khan apprised the Chief Commissioner that exporters all over Pakistan were facing problem due to demand by Sales Tax authorities regarding SRO 660(I)/2007, as amended by SRO 897(I)/2013. According to Rule 3(2) of this SRO, the exporters are required to make payment of one percent withholding sales tax on behalf of purchases from unregistered suppliers. This is a harsh condition for exporters and extra financial burden on them.
Fawad informed the Chief Commissioner that exporters of Sialkot had made an agreement with the authorities in Sialkot there so that they were required to deposit one percent tax of their taxable inputs purchased from unregistered suppliers. He requested to announce same working for Karachi RTO-II. Chief Commissioner asked Fawad to submit the copy of MoU signed with RTO Sialkot in this regard so that they could obtain clarification from FBR in this regard.
The Lahore High Court had also issued a three-month stay order notice against SRO 897 for an exporter who filed a plea against it. Fawad urged the Chief Commissioner to hold SRO 897 in abeyance for a three-month period for all exporters, and hoped that an amicable solution would be reached between exporters and FBR regarding this issue during this time.
Fawad informed the Chief Commissioner that many sales tax refund claims of PLGMEA members had been pending for several years. Several claims are deferred due to some objections which have been cleared. Files of some cases are not traceable in the RTO office. He requested Mrs Lubna to expedite the release of pending refund claims of PLGMEA members and devise a mechanism for reconstructing lost files.
Commissioner Muzaffar Lashari informed the PLGMEA delegation that there is a standard operating procedure (SOP) devised by the department for reconstructing lost files. He advised PLGMEA members to follow that procedure for reconstructing lost files. He nominated Hina Akram Assistant Commissioner Inland Revenue as focal person to deal with deferred claims and lost claims files of PLGMEA members.
Fawad stated that current sales tax claims of exporters were also stuck up since December 2013 due to system related issues. He requested the Chief Commissioner to also issue instructions for release of current refunds. The Chief Commissioner deputed Amjad Moroojo Staff Officer to deal with current refunds and their PRAL/WeBOC/ERS related issues. Additional Commissioner Shakoor was requested to deal with such claims not in the powers of Moroojo. The Chief Commissioner told PLGMEA delegation that because budget all refunds will now be released in July. Fawad further asked about the status of refund claims for tax deposited in Sindh Revenue Board or other provincial revenue authorities. The Chief Commissioner clarified that presently there was no mechanism devised. As soon as FBR devise the system to such refunds, the Inland Revenue department will start releasing the claims of exporters.
Fawad has strongly criticised government's intention of imposing sale tax on exports of leather garments in the upcoming Budget. Fawad has also objected to the government practice of holding all types of Customs, sales tax and income tax refunds of exporters at least one months prior of announcement of budget and releasing them in July. By doing this the FBR is in fact incorrectly inflating their revenues for this year in the upcoming budget. In the end Fawad thanked Chief Commissioner Mrs Lunba Farrukh Mirza and other officials present in the meeting for giving their time to address the sales tax and income tax related issue of PLGMEA members.-PR