Sales Tax Act, 1990: collection of excess sales tax

Sales Tax Act, 1990: collection of excess sales tax

KARACHI: A person is required to pay sales tax, which was collected under misapprehension of any provision of the act and was not collectable or in excess of tax.

The FBR recently updated Sales Tax Act, 1990 and its Section 3B explained the collection of excess sales tax.

Section 3B: Collection of excess sales tax etc

Sub-Section (1): Any person who has collected or collects any tax or charge, whether under misapprehension of any provision of this Act or otherwise, which was not payable as tax or charge or which is in excess of the tax or charge actually payable and the incidence of which has been passed on to the consumer, shall pay the amount of tax or charge so collected to the Federal Government.

Sub-Section (2): Notwithstanding anything contained in any law or judgement of a court, including the Supreme court and a High court, any amount payable to the Federal Government under sub-section (1) shall be deemed to be an arrear of tax or charge payable under this Act and shall be recoverable accordingly and any claim for refund in respect of such amount shall neither be admissible to the registered person nor payable to any court of law or to any person under direction of the court.

Sub-Section (3): The burden of proof that the incidence of tax or charge referred to in sub-section (1) has been or has not been passed to the consumer shall be on the person collecting the tax or charge.