FINDINGS /Recommendations DR. MUHAMMAD SHOAIB SUDDLE, FEDERAL TAX OMBUDSMAN.---This complaint has been lodged by Messrs All Pakistan Textile Processing Mills Association (APTPMA), seeking the Hon'ble FTO's indulgence for settlement of a large number of pending sales tax refunds filed by its members. The complaint has been entertained exercising suo-motu powers under section 9(1) of the Federal Tax Ombudsman Ordinance, 2000.
2. According to APTPMA, a large number of sales tax refund claims were long pending with the Department. As per the list attached with the complaint, sales tax refund claims amounting to Rs.51,042,882 pertained to 28 members alone. The list was subsequently amended vide letter dated 23-4-2011, raising the number of claimants to 82, with refunds amounting to Rs.383,496,863.
3. In response to the notice issued to the Secretary Revenue Division, the Department filed para were comments vide letter dated 23-2-2011, contending that as per their record the total pending refund claims in respect of APTPMA members amounted to Rs.37,536,574 as against the claim of Rs.383,496,863. It was further contended that APTPMA had been requested by the Department to furnish month-were details of individual refund claims so that processing of claims could be expedited.
4. According to APTPMA, it had detailed meetings with the Commissioner, Enforcement and Collection-I, Regional Tax Office, Karachi, and it was agreed that the members whose claims were pending would provide month-were data to the Department, along with supporting documents, so that their claims could be sanctioned as per law. It was also agreed that in case the members failed to get appropriate response from the Department, they would approach the FTO Office for redressal of their grievances. The APTPMA, vide letter dated 3-8-2011, stated that as the refund claims of members would be processed by the Department individually, they would like to request that the complaint filed by APTPMA be treated as withdrawn. The APTPMA was told that as it was a complaint taken up for investigation under the on motion jurisdiction of the Hon'ble Federal Tax Ombudsman, it would be decided on its merits.
5. As regards the huge difference in the number of claims, both the Department and APTPMA were directed to reconcile the figures. The APTPMA vide letter dated 20-10-2011 furnished a reconciled list according to which the number of claimants whose refund claims were still pending had come down to 41 with the amount of balance refunds at Rs.141,707,606.
6. Out of 41 reconciled cases, in the following 10 cases the claimants had lodged individual complaints before the Hon'ble FTO in individual capacity: Name Date of decision by FTO
(i) Messrs Buksh International 5-10-2011
(ii) Messrs Shakir Industries 24-9-2011
(iii) Messrs Startex Industry 14-11-2011
(iv) Messrs Buksh Manufacturing Corporation 1-12-2001
(v) Messrs Arbi Textiles 1-12-2011
(vi) Messrs Sana Textile 2-12-2011 (vii)Messrs Rahim Industries 15-12-2011 (viii)Messrs Sara Textile Under process
(ix) Messrs Fazal Omer Industries =
(x) Messrs Mahmood Brothers Rangrez = Findings:
7. Although the major contentious issue of pending sales tax refund claims has been reconciled with the intervention of the FTO's Office, the need of addressing the systemic issue of maladministration in the sales tax refunds remains.
Recommendations:
8. (i) F.B.R. To direct the Chief Commissioners across Pakistan to clear all more-than-two-month- old pending sales tax refund claims, as per law, within four weeks;
(ii) This being a systemic issue, F.B.R. To put in place an efficient and fool-proof mechanism of expeditious disposal of bona fide refund claims; (i.e) APTPMA to file a monthly statement with the Registrar FTO on more-than-two-month-old pending claims, with a copy to the concerned Chief Commissioner, to enable the FTO Office to monitor this issue on a regular basis; and
(iv) F.B.R. To report compliance of (i) and (ii) above by 13-2-2012.