New rules to make Sales Tax refund more exporter-friendly

ISLAMABAD (March 30 2004): The new 'Sales Tax Refund Rules 2004' will be instrumental in giving preference to exporters under Gold/Silver categories available as per existing rules, making the refund procedure more exporter-friendly.

Moreover, the exporters with more volume of export per annum will be given preference in issuance of refund as compared to those with less volume.

The CBR will also give high rating to exporters who secure earlier registration as compared to newly registered persons.

Official sources told Business Recorder here on Monday that the new refund procedure would not have categorisation of exporters as 'Gold' or 'Silver', etc for payment of refund. But the CBR will definitely give preference to those exporters who were operating under these categories as per existing rules.

Under the new parameters, claimants will be categorised on the basis of past record, annual turnover and overall status of exporter under the existing rules. The exporters with Gold/Silver categories will be considered as low risk under the new rules and could be given green channel facility for speedy payment of refund.

The CBR will shortly discuss these parameters with export associations and representatives of trade bodies.

The parameters will be fed in department's computers for categorisation of exporters as high risk or low risk for issuance of refund through different channels like green, yellow and red.

The CBR has given March 31 as deadline for comments on new refund rules. However, according to sources, no association has proposed any major change in the new rules.

The exporters have opposed comprehensive documentation, including submission of bills of export and bills of lading/airway bills etc under new rules.

The CBR will also verify the authenticity of export documents pertaining to South Africa, UAE and Saudi Arabia under refund procedure 2004, whereas exports to other countries will be treated as low risk on the basis of past record of exporters.

CBR will assign high-risk 'Yellow Channel' or 'Red Channel' to exporters of textile products to UAE, Saudi Arabia and South Africa, and claim sales tax refund against over-valued exports to these countries.

In case of exports to European Union (EU) and the United States of America (USA), the genuine exporters would be able to get refund within 24 hours using 'Green Channel' facility as per refund rules 2004.

As per rule 6 of the proposed refund rules which deals with scrutiny of refund claims-On receipt of the refund claim, it shall be uploaded in Sales Tax Automated Refund Repository (STARR) computer system, which will assign it a unique claim number, process it automatically on the basis of parameters approved by the Board, and assign it to either 'Green', 'Yellow' or 'Red' channel.

The refund cases will be put in high/low risk categories after scrutinising computer profiles of exporters for determining whether refund should be paid promptly or after comprehensive audit.

Following this procedure, commercial exporters and manufacturers-cum-exporters will be declared as Low Risk, Medium Risk or High Risk after going through the profiles of exporters stored in 'STARR refund automation program'.

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