The Federal Board of Revenue (FBR) issued SRO 1498(I)/2026 on 4 September 2026, amending the Sales Tax Rules, 2006, to expand the automated validation window for sales tax refund claims that remain uncleared or unverified after the initial eight system checks.

The notification, issued under Section 50 of the Sales Tax Act, 1990, substitutes the existing text in Rule 29(2) and the second proviso of Rule 39F. Both provisions previously directed that any amount still uncleared after eight validation checks: including the initial check: would be processed directly under the STARR channel or module as referred to in Chapter V of the rules.

What the amended rules now say

The substituted text in both Rule 29(2) and Rule 39F reads:

“After eight validation checks, including the initial one, any amount that remains uncleared or unverified shall be subjected to four additional validation checks or cycles, once every week, by the system in respect of such uncleared or unverified amount. If, after completion of the said four additional validation checks or cycles, any amount still remains uncleared or unverified, the same shall thereafter be processed under the STARR module as referred to in Chapter V.”

The change introduces two modifications from the earlier provision:

  • The threshold condition now covers amounts that are “uncleared or unverified”, not only those that are “uncleared.”
  • Rather than moving directly to STARR after eight checks, the system must conduct four further validation cycles at weekly intervals before escalation.

Which refund claims are affected

The amendments apply to sales tax refund claims processed through the Fully Automated Sales Tax e-Refund (FASTER) system, which handles refunds for exporters. Under the previous Rule 29 procedure, a portion of a FASTER claim that was not verified or found admissible during a validation cycle was held for further weekly checks, and any amount still uncleared after eight cycles was transferred to the STARR channel.

The amended Rule 39F, which mirrors the same change, applies the new procedure to the corresponding refund processing path governed by that rule.

How the updated process works

  • The system conducts its standard eight validation checks, including the initial check, on each refund claim.
  • Any portion of a claim that remains uncleared or unverified after those eight checks does not immediately proceed to the STARR module.
  • Instead, the system runs four additional automated validation cycles, one each week, on the uncleared or unverified amount.
  • A Refund Payment Order (RPO) is generated for any amount found valid during each weekly check, and the details are communicated to the claimant and the relevant Regional Tax Office (RTO) or Large Taxpayer Office (LTO), as well as to the State Bank of Pakistan for payment.
  • If any amount remains uncleared or unverified after all four additional cycles have been completed, that amount is then processed under the STARR module as referred to in Chapter V of the Sales Tax Rules, 2006.

Why the FBR made the change

Tax experts cited in independent reports stated that the additional validation cycles are intended to give exporters’ pending refund claims more opportunities to clear the system’s automated verification requirements before being transferred to the STARR process. The reports added that the FBR introduced the revision after consultations with exporters.

What to do next

Exporters with sales tax refund claims that have been stuck in uncleared or unverified status after the standard eight validation checks should be aware that the system will now continue running weekly checks for up to four more weeks before referring the matter to the STARR module. No immediate action by the claimant is required for these additional automated cycles, but claimants should monitor their FASTER account for RPO notifications or any communication from their RTO or LTO during the extended validation window.

What remains unspecified

The notification does not specify whether the four additional weekly cycles restart the overall refund timeline or how the STARR module’s processing timeline compares with the previous direct-escalation procedure. The FBR has not published implementation guidelines or an official circular explaining the operational details for the additional cycles.