Islamabad: Amid fears of revenue shortfall, the government has approved supplementary grant of Rs 30 billion for encashment of sales tax and income refund bonds of Federal Board of Revenue (FBR).
According to Revenue Division, government introduced a new scheme through the Finance Supplementary (Second Amendment) Act 2019 for disbursement of sales tax refund through sale tax refund bonds. For this purpose, section 67A was inserted in the sales tax act 1990.Similar enabling provisions were also incorporated in the income tax ordinance 2001.
Under this scheme, a company on the name of FBR Refund Settlement Company Limited was incorporated to issue the bonds and refund bonds were issued to the tune of Rs 30 billion approximately. In order to resolve liquidity problem associated with these bonds and procedural bottlenecks of State Bank of Pakistan, it was proposed that the existing amount of bonds to the tune of Rs 30 billion may be redeemed and FBR may issue refunds in the shape of cheques in accordance with prescribed rules as payment out of FBR revenue will create difficulties in achieving assigned targets. FBR proposed that one time grant of Rs 30 billion may be provided for bond redemption as these payments represent clearance of past liability.
Revenue division officials told Newztodays.com that the refunds represent over payment of share to federation as well as provinces in the past, hence finance division may recover provincial share in these refunds from NFC disbursements. Revenue division had requested the government to approve supplementary grant of Rs 30 billion from lump provision of finance division for current financial year 2019-20. The government has approved supplementary grant of Rs 30 billion for encashment of sales tax and income refund bonds of federal board of revenue.