FBR rejects demand for ST refund 

ISLAMABAD: The Federal Board of Revenue (FBR) recently outright rejected a pharmaceutical sector proposal for sales tax refunds to be granted immediately. 

As per FBR, the refund on sales tax would be provided after the zero-rated supply of the end product. 

As per the sources, FBR officials convened with the Pakistan Pharmaceutical Manufacturers Association (PPMA) to address the issue of sales tax refunds. 

The FBR rebuffed the industry's argument that refunds should be issued after purchasing inputs but before producing or supplying completed goods. Further, the FBR has also requested that the Drug Regulatory Authority of Pakistan (DRAP) produce a list of goods that have been classified as medications. 

Sales tax on imports of raw materials and inputs utilised in the manufacture of drugs/medicines registered with the DRAP would be reimbursed by the FBR.

There would be no sales tax refunds on items not registered as pharmaceuticals with the DRAP. According to FBR authorities, there is no legal reason for granting sales tax refunds at the point of purchase.