The Federal Board of Revenue (FBR), here on Wednesday, decided to implement it’s sales tax refund system named “FASTER-Pharma” for the pharmaceutical sector. It will process the sales tax refunds within 48 hours on the import of raw materials consumed in the manufacturing of medicines.
Federal Board of Revenue (FBR) has planned to implement it in the next 10-15 days.
The meeting was held to update on the preparation of the software named as “FASTER-Pharma” on the pattern of the existing “FASTER” system.
FBR Member Inland Revenue showed commitment to ensure payment of refunds to the medicine companies within 48 days of the filing of their sales tax returns.
The refunds would be promptly paid to the pharmaceutical companies in 48 hours after manufacturing and supply of the medicines.
The amount of sales tax refunds would be directly credited to the bank accounts of the pharmaceutical companies.
The sales tax refund would be processed only on the actual consumption of raw materials and inputs.
It is important to note that no refund would be processed on the raw materials not consumed in the manufacturing of the finished products and supplied in the market.
In the meeting it was informed that the “FASTER-Pharma” would be a unique one because it would cover only one sector which is pharmaceutical companies.
Sales tax refunds will be paid swiftly, as only pharmaceutical companies would be covered under the category of the “FASTER-Pharma”.
But the sales tax refunds under faster system would not be available on non-pharmaceutical items such as energy drinks, medicated shampoos, and other items wrongly covered under the head of pharma inputs and raw materials.
For this purpose, the FBR has already obtained list of items registered as drugs with the Drug Regulatory Authority of Pakistan (DRAP).
The FBR will only responsible to pay refunds on the import of raw materials and inputs used in the manufacturing of drugs/medicines registered with the Drug Regulatory Authority of Pakistan (DRAP).
What “Faster-Pharma” will bring?
The FBR also explained to the industry that the FBR will specify in the sales tax rules that the refunds would be issued within 48 hours under the “FASTER-Pharma”.
Pharmaceutical products are made zero-rated and any tax paid on their inputs is made refundable. This measure will bring transparency to the sector and help the FBR in documenting the entire supply chain.
It will also control and reduce the price of pharmaceutical goods. In order to process the refund claims of this sector, a refund module on the pattern of FASTER is devised, the FBR added.
Source: Business Recorder