Sales Tax Instructions

Sales Tax Instructions, 2009
the period the provisions of the aforesaid section, as existed prior to the substitution shall
remain operative.
[Issued by the CBR., Islamabad, under the signature of Dr. Ashfaq Ahmed Tunio,
Secretary (ST-L&P), addressed to the Collector, Sales Tax & Central Excise,
Peshawar/Rawalpindi/Lahore/Gujranwala Sales Tax House, Karachi; the Collectors, Customs,
Sales Tax & Central Excise, Hyderabad/ Multan/ Quetta; the Collector, Collectorate of Sales Tax,
Faisalabad & the Collector of Sales Tax, Large Taxpayers Unit, Karachi.]
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C. NO.3(19)ST-L&P/2003 DATED 28 TH FEBRUARY, 2004
SUBJECT:- DRAFT REFUND RULES, 2004
I am directed to refer to the subject cited above and to say that exporters,
chambers, associations and other trade bodies have been persistently complaining that the
sales tax refund procedure has become increasingly complicated and cumbersome over
the years. Their grievance was that on the pretext of attempting to stop excessive and
bogus refunds, each new set of Refund Rules introduced additional documentary
requirements, checks and verifications, as a result of which the entire refund procedure
became an arduous and time-consuming exercise for genuine exporters.
2. As a part of the reform strategy of the Central Board of Revenue, it has
been decided that the refund procedure should be simplified and automated as far as
possible, based upon the principles of risk management. Thus, exporters with a good
profile should get their sales tax refund swiftly and without unnecessary pre-sanction
scrutiny, while others would be subject to scrutiny or audit commensurate with their
profile. Thus, the concept of ‗green‘, ‗yellow‘ and ‗red‘ channels has been introduced.
This is different from the old concept of ‗gold‘, ‗silver‘ and ‗others‘, which despite
having a profiling system, did not reduce the number of pre-sanction checks for good
exporters.
3. The draft Refund Rules, 2004 not only introduce this concept of risk
based processing, but also envisage almost complete automated processing of refund
claims. The present STARR system will be enhanced with the introduction of
‗STREAMS‘ (exporter profiling and risk management) system, and almost all
verifications, calculations and processing would be completed through the computer
system. This will reduce the discretion and interference of the refund processing staff,
and avoid delays. One tier of officials has also been removed, and the claim will be
directly sent to the sanctioning officer by the processing officer.
4. In the case of manufacturer-cum-exporters, the new Refund Rules also
eliminate the concept of part payment on stocks of goods to be exported. It had been
observed that payment of refund on stocks in two parts was creating a lot of
complications, involved cumbersome calculations. As a result, many manufacturer-cum-