Karachi, December 15, 2024 – The Federal Board of Revenue (FBR) has clarified the treatment for the collection of excess sales tax, as outlined in Section 3B of the Sales Tax Act, 1990. This section addresses scenarios where excess tax is collected from consumers, whether due to misinterpretation of legal provisions or other reasons. Key Provisions of Section 3B According to the FBR, the following rules apply: 1. Obligation to Pay Excess Tax to the Federal Government: Sub-section (1) mandates that any person who collects sales tax, either mistakenly or otherwise, and passes the burden onto consumers, must remit the excess tax to the Federal Government. The FBR emphasized that this applies irrespective of whether the tax was initially payable or not. 2. Recovery of Excess Tax as Arrears: Sub-section (2) states that any excess tax collected will be treated as arrears of tax. The FBR clarified that this amount is recoverable under the Sales Tax Act, 1990, and no refund claims will be entertained. Furthermore, such claims cannot be pursued in any court, including the Supreme Court or High Courts. 3. Burden of Proof on the Collector: Under sub-section (3), the burden of proving whether the tax incidence was passed on to consumers lies with the person who collected the tax. The FBR highlighted the importance of maintaining accurate records and documentation…