ISLAMABAD   -   Central Depository Company (CDC) has urged businessmen to open up sub account or investor account with Central Depository Company of Pakistan Limited (CDC) in order to get sales tax refund payments through refund bonds.

The federal government has planned to clear approximately Rs40 to Rs60 billion refund claims through this scheme. Meanwhile, it has finalized around 600 refund claimants who can sales tax refund payments through refund bonds. However, around 200 businessmen out of total 600 sales tax refunds claimants have so far opened their CDC accounts which are approximately 33 percent.

The CDC has already facilitated 90 businessmen, who had opened their CDC Accounts, in getting Rs7 billion sales tax refund payments through refund bonds, according to press release issued by the Central Depository Company.

This initiative was taken subsequent to the approval of amendments in Supplementary (Second Amendment) Act, 2019 by the federal government. In this regard, the Federal Board of Revenue (FBR) has also asked the refund claimants to open Sub Account or Investor Account with Central Depository Company of Pakistan Limited (CDC) and has issued procedures for opening of such accounts.

The issuance of these Refund Bonds in book entry form through Central Depository System (CDS) will also help create ease of doing business for claimants as the Refund Bonds will be issued electronically in the system and there will be no paper or certificate issued. The claimants may just log in to the CDC web system and confirm that their Refund Bonds have been credited. In addition to this, the financing against Refund Bonds by Banks will also be very simple and efficient as Banks are already using CDC system and providing financing against different type of securities worth millions of rupees on daily basis. All the claimants need to do is to go to the Bank and mention their CDC account number and the Bank will retrieve all the information on real time basis from CDC system through CDC Pledge functionality and create a charge against these Refund Bonds with a simple click of the button.  

While commenting on this effort, Badiuddin Akber, CEO-CDC, said: “CDC has always been ready to play its part in the progress and development of the country’s economy. We are more than willing to introduce convenience in doing business through digitalization to make our economy more business friendly and this initiative is one more step towards it.”