FBR Increases Limit on Deferred Sales Tax Refunds for Exporters Under FASTER System

By News Desk

The Federal Board of Revenue (FBR) has increased the upper limit for deferred sales tax refunds under the FASTER system, allowing exporters outside the five major export sectors to claim refunds up to 10% of their export value.

According to fresh instructions issued to FBR field formations, the new cap applies to all exporters not falling within the five core export-oriented sectors. The decision follows the issuance of SRO 1507(I)/2024 and is aimed at improving the efficiency and consistency of the refund process.

Previously, refund caps varied between 2% and 8% depending on the nature of the exporters’ finished products. The revised policy now standardizes the limit, enabling broader access to refunds and facilitating ease of doing business for non-core export sectors.

Under the updated mechanism, the maximum allowable refund will be the lesser of two amounts: 10% of the declared export value or the actual input tax incurred on exported goods. This approach is intended to balance facilitation with tax compliance.

The adjustment marks a significant policy shift toward a more transparent and predictable sales tax refund framework for exporters not traditionally prioritized in earlier FBR refund policies.