Audit Urges Unified Refund Platform as FBR’s STARR Lags Behind FASTER in Efficiency

The Federal Board of Revenue’s (FBR) “FASTER” refund payment system took eight to 19 days to process refunds whereas the “STARR” system took 286 to 753 days to process payment of sales tax refunds. An impact study (2023-24) of the Fully Automated Sales Tax E-refund (FASTER) system of the Auditor General of Pakistan (AGP) revealed that both systems are running parallel for processing of refund payments. The main difference between the two systems is that cases through FASTER are processed centrally for all stages i.e. from verification of claims to upto authorization of payment at the FBR headquarters. On the other hand, the processing and sanctioning of refund through STARR system is dealt by the respective field formation. The refunds through the “FASTER” have increased in comparison to refunds through STARR, both in terms of number of claims as well as total claimed amount. The report added that the “FASTER” took 8 to 19 days on average for processing while processing through the “STARR” system varied from 286 to 753 days. Post-processing delays are another hurdle faced by taxpayers while claiming input tax refunds. Average credit days ranged from 153 to 173 days in STARR, while cases processed through “FASTER” took 9 to 29 days, report maintained. The AGP has recommended that there should be one platform for processing of refund cases. Other sectors not falling within its ambit as of now may also be allowed to file refund claims through “FASTER”. The tax gap framework of the FBR needs to be reviewed to incorporate refund liabilities and potential refunds. The department needs to address the systemic issue of non-payment of refunds. Risk categorization of pending refund claims be carried out and payments be prioritized according to risk, AGP report added.