AGP begins probe into refunds, drawbacks and rebates

ISLAMABAD: The Auditor General of Pakistan (AGP) has started investigation into the sales tax refunds, duty drawback and customs rebate paid to exporters under the Prime Minister’s Relief Package for Covid-19.

Sources told Business Recorder here on Tuesday that the AGP has obtained the names of the exporters and other categories of taxpayers, who have obtained sales tax refunds under the Prime Minister’s COVID-19 Relief Package.

The AGP office has again requested the FBR to also provide the names of exporters or registered taxpayers, who have obtained the customs duty drawback/rebate for audit purposes.

Sources said that the AGP would investigate whether the sales tax refunds and rebates were duly paid as per law under the PM package. On April 4, 2020, Finance Ministry stated that the government has released Rs100 billion to industry under tax refunds under the government’s Rs1,240 billion stimulus package announced by the prime minister on March 27.

On the special instructions of the AGP, the Directorate General Audit Inland Revenue and Customs Lahore has started the audit of the FBR’s tax records.

According to the AGP, a relief package was announced by the federal government under which government allowed refunds to the tune of Rs 100 billion. The FBR should provide details of modalities for issuance of refunds/duty drawbacks/rebates under this package along with the total value of the amount issued to the exporters.

The AGP has also asked the FBR that the details of refund claimants and refund sanctioned in each case may also be provided including National Tax Number (NTN), Sales Tax Registration Number (STRN), name of refund claimant, amount of refund claimed and amount of refund issued.

Sources said that the AGP has also deputed a team at the FBR to collect data relating to the Prime Minister’s relief package for Covid-19. The AGP has intimated the FBR that the AGP office has to complete the audit of the PM relief package within the constrained timelines and submit a report to the Auditor General. However, only data pertaining to the sales tax refunds has been provided so far. The FBR is requested to provide the remaining data at the earliest.

The AGP has also asked the FBR to provide the following information relating to the relief package:

Firstly, special procedures, instructions, SROs, if any issued by the Economic Coordination Committee (ECC), FBR or the federal government.

Secondly, special allocation of funds by the federal government if any, related to this relief package.

Thirdly, total financial impact/total release of funds by the Finance Division up to June 30, 2020. The matter may be accorded top priority as delay in provision of data/information can cause hindrance in audit functions of the Auditor General of Pakistan (AGP), the AGP office added.—SOHAIL SARFRAZ