Federal Board of Revenue vide S.R.O. 214(I)2021 dated 18th February 18, 2021 has revised the Chapter XVIB of Income Tax Rules 2002 relating to refund orders issued under Section 170(4) of the Income Tax Ordinance, 2001. The same were earlier inserted by SRO 1314(1)/2020 dated December 09, 2020. The new rules further streamline the process of sanctioning and payments of refunds. Salient features of the new chapter are as follows:
- Establishment of Centralized Income Tax Refund Officer (CITRO) under the Federal Board of Revenue for centralized payment of refunds. Date of payments through this system is to be notified later by FBR.
- The Commissioner shall pass order regarding refund after completing all codal formalities and transmit the order to CITRO which shall also be reflected in CITRO in real time.
- The CITRO shall generate electronic advice of approved amount for onwards submission to State Bank of Pakistan (SBP) through dedicated VPN tunnel established between FBR and SBP. The SBP shall credit the amount directly to the taxpayer’s account.
- SBP shall confirm the transfer of amounts to the taxpayers account or vice versa electronically through CITRO.
- The CITRO shall reconcile the payments issued as per instructions during the month with the electronic scrolls received from SBP and record the outcome of such reconciliations in the system.
- Where any payment instruction is returned back by SBP due to any reason, the CITRO shall transmit the same to concerned Commissioner for correction of payment instruction.
- FBR shall ensure complete availability of electronic data related to refunds issued to the concerned Commissioner.