The Federal Board of Revenue (FBR) has introduced stage-wise timelines for processing deferred sales tax refund claims under the FASTER system, directing field formations to clear pending cases and stop further backlog.
The move addresses prolonged delays in claims that FASTER deferred after completing prescribed validation checks but that remained stuck with field formations, mainly due to missing documents and slow follow-up processing.
Under the new procedure, a deferred memo will be issued through FASTER to both the taxpayer and the concerned field office once 12 validation checks or cycles are completed. The field office must then ask the taxpayer to submit the required records within seven days.
If a taxpayer fails to respond or submits incomplete documents, the department will issue an objection memo followed by reminders. Continued non-compliance will result in proceedings for a show-cause notice.
The procedure also requires refund claims to be replicated and verified through STARR before being processed and forwarded to the sanctioning officer. Examination and sanction of admissible refunds, along with issuance of Refund Payment Orders (RPOs) and show-cause notices, will follow prescribed timelines as well.
FBR has directed all Chief Commissioners Inland Revenue to ensure compliance with the new schedule, stating that the measures are meant to expedite deferred refunds and resolve taxpayers’ concerns over prolonged delays.
Refund claimants will be required to submit a prescribed set of records, including their sales tax registration number and NTN, sales and purchase invoices, import and export Goods Declarations, monthly returns with annexures, bank details, sales registers, and documents confirming compliance with Section 73.
The receiving or processing officer will verify the availability of these documents upon receipt of a refund file and record any deficiencies found.
FBR clarified that the new timelines will not apply to claims involving excess carry-forward amounts or input tax carried forward under Section 8B of the Sales Tax Act, 1990.
