ST refund/ adjustment issue to be taken up with CCI, Ministry

RECORDER REPORT

ISLAMABAD: The Federal Board of Revenue (FBR) has assured Overseas Investors Chamber of Commerce and Industry (OICCI) to take up the issue of bilateral sales tax refund/adjustment between federation and provinces at forums like Council of Common Interest (CCI) or Finance Ministry’s level in broader consultation with provinces.

Sources told Business Recorder here on Wednesday that the issue of inter-provincial refunds/adjustments or bilateral sales tax adjustment between federation and provinces was discussed between the tax authorities of the FBR and senior representatives of the OICCI at their Office at Karachi. The FBR side was represented by Shahid Hussain Asad Member (Inland Revenue) Policy and designated Official Spokesperson of FBR; Chief Commissioner Large Taxpayer Unit (LTU) Karachi Dr Muhammad Irshad, Commissioners of LTU Karachi, Additional Commissioners of LTU Karachi and other tax officials.

The OICCI have presented 8-10 major issues faced by registered taxpayers as well as investors after announcement of the federal budget (2014-15).

It was pointed out that a Memorandum of Understanding (MoU) was signed among the FBR, Sindh Revenue Board (SRB) and Punjab Revenue Authority (PRA) on the mechanism of bilateral sales tax adjustment between federation and each of the provinces. However, the issue of taxpayers pertaining to refunds has yet not been fully resolved.

It was assured by the tax authorities that the FBR will propose the government to have broader consultation between the federation and provinces to resolve the issue of the taxpayers. A broader consultation is required at the level or CCI or consultation between the Finance Ministry and provinces. As the FBR cannot unilaterally resolve the issue of inter-provincial refunds, the broader level consultation among the federal and provincial governments is required.

According to the sources, the meeting also discussed the issue of rescinding SRO.575 in budget (2014-15). A new Fifth Schedule was added to the Customs Act, 1969. The Parts-I, II and III of the said Schedule contains concessions and exemptions available earlier in the rescinded SROs 567(I)/2006 and 575(I)/2006, dated 5.6.2006. The taxpayers have already imported machinery, equipment etc when the SRO.575 was operative before announcement of budget (2014-15). Now certain kind of imported machinery under the rescinded SRO.575 becomes liable to taxes after rescinding of the said SRO in budget.

In budget (2014-15), the FBR had introduced major changes in SRO.567(I)/2006 and concessions to 7 sectors having import value below Rs.30 million annually were withdrawn by shifting to normal tariff rates. Under SRO.567(I)/2006, the concessions to 95 items having import value below 30 million annually were withdrawn. Under SRO.565(I)/2006, the concessions to inputs of 89 products having import value below 30 million annually were also withdrawn.

The problems in filing of new income tax return form also came under discussion during the meeting between the FBR and the OICCI. It was pointed out that if the taxpayers were unable to timely file their returns, the FBR will have to extend the date of filing of returns beyond October 31, 2014.

The issue of delay in payment of refunds has also been raised by the OICCI during the meeting with the tax authorities, sources added.