Mohsin Siddiqui (Chief Reporter)

Federal Tax Ombudsman (FTO) has instructed the Federal Board of Revenue (FBR) to promptly address missing amounts and deferred sales tax refunds for a prominent multinational pharmaceutical company. The FTO issued strict directives to the FBR, emphasizing the urgency of the matter. Glaxo SmithKline Pakistan Limited, listed on the Pakistan Stock Exchange, is actively involved in manufacturing and marketing pharmaceutical products.

The complainant submitted sales tax refund claims for tax periods spanning from February 2022 to June 2022 through the FASTER Pharma module. As per regulations, refunds under this module must be processed within 72 hours of submission, in compliance with the Sales Tax Rules 2006.

Nonetheless, the FTO’s directive highlights the failure to process missing amounts and deferred sales tax refunds within the stipulated time frame, constituting maladministration. The FBR is urged to ensure the linkage of missing refunds and process them in accordance with Circular No. 03 of 2020.

Furthermore, the Commissioner, Zone-III, LTO Karachi, is tasked with processing deferred sales tax refund claims for the specified tax periods, adhering to relevant regulations for the issuance of RPOs.

The complainant, a significant player in the pharmaceutical industry, filed refund claims amounting to Rs 2,281.254 million. While a substantial portion was processed and sanctioned, a balance of Rs 408.782 million was erroneously marked as carry forward. Both parties acknowledge the shortfall in refund amounts.

The resolution of this issue hinges on determining the appropriate method for processing the missing amount, either through Circular No. 1 of 2020 or Circular No. 3 of 2020. It is imperative to avoid unnecessary complications and injustice to the complainant.

In conclusion, the FTO stresses the importance of resolving this matter promptly and fairly, given the mutual agreement between the complainant and the FBR regarding the shortfall in refund payments.