FBR Refunds Rs. 37 Billion to Taxpayers in September 2023

The Federal Board of Revenue (FBR) has paid refunds amounting to Rs. 37 billion during September 2023 as compared to Rs. 18 billion issued in September 2022, reflecting an increase of Rs. 19 billion. According to the data of tax collection released by the FBR, the total amount of refunds paid during July-September (2023-24) stood at Rs. 128 billion. The refunds amounting to Rs. 42 billion were issued in August 2023 as against Rs. 38 billion in August 2022. The FBR has paid refunds amounting to Rs. 49 billion in July 2023. The FBR is required to check bogus refunds and leakages to increase genuine refund payments. The estimated sales tax amount evaded through the fraudulent use of flying invoices through illegal refunds and tax adjustments stood at nearly Rs. 5-6 trillion. The use of fake invoices has been reduced due to system checks, but the phenomenon of flying invoices has increased. The estimated amount of sales tax evaded with the help of flying invoices comes to the tune of Rs. 5-6 trillion, sources said. Federal Tax Ombudsman (FTO) has strongly recommended the Federal Board of Revenue (FBR) conduct physical verification of business premises of all manufacturers, who file the first claim for sales tax refund in the “FASTER” refund system. According to an order of the FTO, the FBR may consider the following measures to develop adequate safeguards in the refund systems of FASTER: Actual verification of payment deposit may be put in place in the FASTER instead of invoice-based input verification mechanism. There are only two ways of sales tax payment: Currently, the input validation process through columns 7(a) and 7(b) is in place. Evidence-based physical transactions will ensure input tax deposits in the government treasury.