KARACHI (November 09 2003): The Central Board of Revenue (CBR) has agreed to release the pending sales tax refund claims of leather exporters on the basis of a benchmark of four percent of the freight on board (FOB) value for chemicals used in the manufacturing of leather. The claims pertained mostly to the members of Pakistan Tanners Association (PTA) of the northern region.
The understanding was reached between the member, Sales Tax, Shahid Ahmed, and PTA Chairman Naseem Ahmed.
It provides that the sales tax refund rate cannot be fixed, as the exporters are required to get what they have paid as tax.
The Sales Tax Collector will fix a time-limit for the settlement of claims in which chemical consumption ratio, in excess of four percent of the FOB value.
Each Collectorate will set up a committee, comprising the PTA members, to help settle the pending claims.
Naseem Ahmed has requested the member, Sales Tax, to have a meeting with the PTA to resolve the problem for future, as the rate of refund cannot be fixed.
Members must get the refunds on their genuine claims irrespective of the any fixed percentage under the provisions of the Sales Tax Act.
He said that the PTA was ready to help investigate cases in which the amount of refund claimed was in excess of the tax paid.
He called for adoption of a regular procedure for the speedy clearance of the sales tax refund.
The PTA has appreciated the gesture and co-operation of the member, CBR Sales Tax, Shahid Ahmed, who took a positive approach to solve the long outstanding problems of the exporters and order release of their long unpaid claims pending with the Lahore Collectorate.
Naseem Ahmed strongly refuted a press report, suggesting that the leather exporters were claiming refunds at very high rates, and said that in general, the PTA members made genuine claims, but even their genuine claims had been held up unnecessarily by the Sales Tax Collectorate.
Meanwhile, the PTA has taken strong exception to the findings of Input Output Co-efficient Organisation (IOCO) regarding fixing a benchmark for refund and its advice to exporters to claim refund in the light of this benchmark if their claim amount is lower than the benchmark.
It said that it had always been a practice that the majority of genuine claimants of refunds were made to suffer for the wrong doings of a few. Care should be taken to evolve a method to ensure that the genuine claimants do not suffer, said the PTA.