INDEX

1. 2. 3. 4. 5. 6. 7. Short Title, application and commencement.- ................................................................................. 1 Definitions.- .................................................................................................................................... 2 Establishment of Fast Track Channel.- ............................................................................................. 2 Filing of refund claim.- .................................................................................................................... 2 Scrutiny and processing of refund claim.-........................................................................................ 2 Sanction and payment of refund claim.-.......................................................................................... 3 Screening Channel.- ........................................................................................................................ 3

SALES TAX REFUND ON TAXABLE INPUT USED IN ZERO-RATED SUPPLY, RULES 2006
S.R.O. 330(I)/2006, Islamabad, the 4th April, 2006.In exercise of the powers conferred by section 50 of the Sales Tax Act, 1990, read with section 10 thereof, the Central Board of Revenue is pleased to make the following rules, namely:SALES TAX REFUND ON TAXABLE INPUTS USED IN ZERO-RATED SUPPLY, RULES, 2006

1. (1)

Short Title, application and commencement.These rules may be called the Sales Tax Refund on Zero-Rated Supply, Rules, 2006. They shall apply to registered manufacturers who procure sales tax paid inputs used in zero-rated supplies under section 4 of the Act, read with Notification No. S.R.O. 621(I)/2005, dated the 17th June, 2005, and shall exclusively be applicable to such inputs procured on or after the 6th June, 2005. These shall come into force at once.

(2)

(3)

2.

Definitions.In these Rules, unless the subject or context otherwise requires,(a) (b) Act means the Sales Tax Act, 1990; claimant means registered manufacturer engaged in the manufacture and supply of goods zero-rated under Notification No. S.R.O 621(I)/2005, dated the 17th June, 2005; sanctioning authority means Deputy Collector of sales tax or any other officer of sales tax who holds full or partial charge of the Fast Track Channel established under rule 3; system means the duly approved sales tax data base; table means the table annexed to these rules; and Zero-rated supply means the supply of goods which has been zero-rated for sales tax purpose under Notification No. S.R.O. 621(I)/2005, dated the 17th June, 2005.

(c)

(d) (e) (f)

3.

Establishment of Fast Track Channel.There shall be established a Fast Track Channel in each Collectorate of Sales Tax to receive, process and settle the refund claims relating to tax paid inputs used in the manufacture of goods which stand zero-rated under Notification No. S.R.O.621(I)/2005, dated the 17th June, 2005.

4. (1)

Filing of refund claim.Registered manufacturers engaged in the production of zero-rated goods shall furnish data relating to the sales tax paid inputs, consumed in zero-rated supplies, on soft as well as hard copy as per Table-I for imported inputs and; as per Table II for locally purchased goods. The computer section shall receive the data with acknowledgement and store it in the system immediately. Scrutiny and processing of refund claim.On receipt of a refund claim, each claim shall be assigned a claim number by the computer section. Inputs directly imported and consumed in zero-rated goods by the claimant shall be immediately validated.

5. (1)

(2)

(3)

Taxable purchases received by the claimant from public limited companies and consumed in goods which are used in the zero-rated supplies by him, shall also be validated for refund. The taxable inputs approved for refund shall be generated by the system. The auditor/senior auditor shall transmit the approved data to the sanctioning authority along with the hard copy, after deductions, if any. Sanction and payment of refund claim.The sanctioning authority shall sanction, subject to the provisions of sub-section (3) of section 10 of the Act, the validated amount, for which the refund payment order (RPO) shall be generated by the system, and send the hard copy to PostRefund Section which shall complete the scrutiny within one month. The refund on construction material shall be processed on case to case basis. The Chief Accounts Officer (CAO) of the Collectorate shall issue the cheque for the amount sanctioned in the RPO under sub-rule (1). After issuance of cheque, existing procedure shall be followed for the accountal of the cheques with the State Bank of Pakistan scroll. The refund filed under these rules shall be sanctioned within seven days from submission of refund claim under rule 4, subject to the provisions of sub-section (4) of section 10 of Act. Screening Channel.Amount of input sales tax not validated by the system shall be sent by the sanctioning authority to the screening channel along with a hard copy to be processed manually. The screening channel auditor/senior auditor shall intimate the objections generated by the system to the concerned refund claimants in the form of show cause notice through courier. The sanctioning authority shall pass the orders as per merit of the case within prescribed time on the admissibility or otherwise of the amount of input tax which was not validated by the system.

(4) (5)

6. (1)

(2) (3)

(4)

(5)

7. (1)

(2)

(3)

Table-I (Imported Inputs)

Name of Importer Bill of Entry #& Date Tax Paid Inputs Description Quantity of goods No. Weight Value Zero-rated goods Quantity consumed Description of goods No. Weight Value

Name of Supplier

Table-II (Locally Purchased Inputs) Tax Paid Inputs Zero-rated goods Invoice Description Quantity Value Quantity consumed Description #& of goods of goods No. Weight No. Weight Value Date