Karachi, April 25, 2024 – The Pakistan Business Council (PBC) has called for significant modifications to the FASTER system, aiming to extend sales tax refund benefits to all exporters and facilitate the adjustment of provincial input tax on services. This move seeks to correct the current system’s limitations, which disproportionately affect exporters outside of the five primary export-oriented sectors. In a detailed letter addressed to Afaque Ahmed Qureshi, Member Inland Revenue (Policy), the PBC expressed concerns over the existing operational framework of the FASTER system, which presently processes sales tax refunds exclusively for five designated export sectors. This restriction has been in place since October 2023 following the FBR’s decision to enforce Rule 39B of the Sales Tax Rules, 2006, which supports these limitations. The PBC highlighted that prior to the withdrawal of the zero-rated regime on July 1, 2019, the FASTER system was introduced to process refunds efficiently across all export categories. However, the subsequent narrowing of its scope has led to non-preferential sectors relying on a manual refund process since October last year. According to the PBC, this shift not only slows down operations but also opens up avenues for potential misuse by both unscrupulous elements within the business community and the FBR itself. Further complicating matters, the PBC pointed out inconsistencies in the handling of input tax adjustments. Despite legal provisions allowing exporters to claim input tax on invoices from service providers registered under provincial sales tax authorities, the FASTER system, in practice, often disallows such claims. This issue persists irrespective of whether the process is automated or manual, undermining the system’s efficiency and fairness. The PBC’s concerns are rooted in procedural flaws that could potentially stifle the export sector’s growth. By…