The business community can now receive unlimited refunds on customs duty through the authority given by the Federal Board of Revenue (FBR) to the Collectors of Customs. The FBR has issued SRO.342(I)2023 to set a maximum limit for refunds issued by Customs officials. However, the SRO specifies that collectors have the legal power to issue refunds without any limit.
According to the new regulations, Additional Collectors of Customs can authorize refunds up to Rs. 2.5 million, Deputy Collectors of Customs can sanction refunds up to Rs. 1 million, and Assistant Collectors of Customs can grant refunds not exceeding Rs. 0.2 million.
The Customs Act 1969 states that any claim for a refund of customs duties or charges paid or overpaid due to inadvertence, error, or misconstruction must be made within one year of the payment date. In the case of provisional payments made under section 81 of the Customs Act, the one-year period is counted from the date of duty adjustment after the final assessment.
If a refund is due because of a decision or judgment by an appropriate Customs officer, the Board, the Appellate Tribunal, or the Court, the one-year period begins on the date of the decision or judgment.