Updated law allows public and electronic auctions while ensuring transparent disposal of seized goods
ISLAMABAD: The Federal Board of Revenue (FBR) has been empowered to auction confiscated goods under the updated Sales Tax Act, 1990, enabling the tax authority to dispose of seized items through public auctions, including electronic auctions, in accordance with the law.
According to the Sales Tax Act, 1990, updated up to June 30, 2026, any goods confiscated under the provisions of the Act must be sold through a public auction. The measure is aimed at ensuring a transparent and regulated mechanism for disposing of confiscated goods while safeguarding government revenue and the rights of eligible owners.
FBR allowed to conduct e-auctions
The amended law provides that confiscated goods may be auctioned not only through conventional public auctions but also through electronic auctions, subject to procedures prescribed by the FBR.
The introduction of e-auctions is expected to improve transparency, widen public participation and streamline the disposal process.
The updated provisions further require the FBR to comply with the Public Procurement Regulatory Authority (PPRA) Rules, 2004, for all auctions conducted under the Sales Tax Act. This requirement is intended to ensure that the auction process remains fair, competitive and transparent.
How auction proceeds will be distributed
The amended law also specifies the order in which proceeds from the sale of confiscated goods will be utilised.
The proceeds will first be used to cover the expenses incurred in conducting the auction. The remaining amount will then be applied towards outstanding sales tax, other applicable taxes, government dues, penalties and surcharges payable to the Federal Government in relation to the confiscated goods.
If any balance remains after these deductions, it will be paid to the owner of the confiscated goods, provided the goods were not liable to outright confiscation. However, the owner must submit a claim within six months from the date of the auction.
If no claim is made within the prescribed period, the remaining balance will be deposited into the government treasury.
Importers’ compensation capped
The updated law also contains a specific provision for imported goods where a goods declaration has already been filed.
In such cases, the importer’s share of the auction proceeds cannot exceed the declared value of the imported goods, ensuring that compensation remains within the value declared at the time of import.
Stronger enforcement framework
The revised provisions are expected to strengthen the legal framework governing the disposal of confiscated goods, improve transparency through digital auction mechanisms and facilitate more efficient recovery of government taxes and dues while protecting the legitimate interests of eligible owners.