The Federal Board of Revenue has prescribed stage-wise timelines for processing sales tax refund claims that have been deferred through the FASTER system. The initiative is aimed at clearing long-pending refund cases and preventing deferred claims from remaining unresolved at field formation level.
Under the prescribed mechanism, once a refund claim has gone through 12 validation checks/cycles and is deferred, the deferred memo will be communicated through FASTER. The concerned field office must then ask the taxpayer to provide the required documents within seven days. Where the taxpayer fails to comply, or provides incomplete information, an objection memo and reminders may follow, ultimately leading to show-cause proceedings in cases of continued non-compliance.
The process also requires STARR replication and verification, examination of the claim, submission to the sanctioning authority and, where admissible, issuance of the Refund Payment Order (RPO) within prescribed timelines. Importantly, the instructions do not apply to refund claims relating to excess carry-forward amounts or input tax carried forward under Section 8B of the Sales Tax Act, 1990. For businesses with deferred refunds, maintaining complete invoices, GDs, returns, banking records, sales registers and Section 73 documentation will therefore be increasingly important for timely disposal.