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There have been some reports in the press that FBR is collecting advance from banks and paying 15% markup on it to add to its revenue collection. It is hereby clarified:
a)FBR has not taken any advance from the banks.
b)Compensation is being paid in only those cases where Appellate Tribunal/High Court/Supreme Court have set aside demand created and collected by FBR in the past.
c)Many of these cases have not attained finality. However, compensation is being paid as per Income Tax Ordinance, 2001.
d)These cases pertain to the period 1991 to 2012.
e)Compensation paid is subject to 35% income tax. Thus the effective rate is 9.75% and not 15%.
f)For future, FBR has decided that in such cases if refund is created as a result of decision of an appellate authority, the Commissioner must immediately file an application seeking stay order along with the appeal against the appellate order. If stay order is not granted or the order has attained finality the decretal amount must be settled within three months of the order. This will ensure that such a problem does not arise in future.