Verification of payment, post refund audit of sales tax refunds

[Lahore_Real_Estate]

FBR to utilise services of Inland Revenue's auditors
ISLAMABAD (October 25, 2010) : Federal Board of Revenue (FBR) is expected to effectively utilise the services of over 350-400 Inland Revenue Audit Officers for verification of tax payments and Post Refund Audit of sales tax refunds paid to the exporters under the exercise to check authenticity of refunds and actual tax payments of registered units.

Sources said that the sales tax audit could help increase revenue collection based on the tax profiles of the registered units being maintained by the tax department. The focus on investigative audit and Post Refund Audit based on data maintained by the department can help in verification of tax payments. The tax profiles of the registered taxpayers can be verified in cases where these are discrepancies in filing of returns. At the same time, Post Refund Audit is an important tool to generate additional revenue and verify data cleared by the STARR and other refund payments systems.

Sources said that the audit officers could play a vital role in conducting post refund audit. The exporter owned critical profile analyses could be done by the auditors. It could be verified whether suppliers are suspected or not, whether all inputs have been used in final export product. The verification of payment proof, bank statements, shipping bills, Bill of Landing and verification of form-E is needed before issuance of refunds. The verification of the production capacity of exporters taking into account the manufacturing plant and machinery could also be done under the exercise.

There is a need to verify duration between dates of purchase invoices and date of export description of goods mentioned in purchase invoices match with description of export goods mentioned in shipping bills and B/L, form E. Other verifications included BCA-bank credit advice and packing material actually used in exports or not. Sources said that there is a need of detailed scrutiny of record during processing of refund claims under the ERS facility.