- The Finance Act 2025 amends the Sales Tax Act 1990 to penalize erroneous sales tax refunds.
- Effective July 1, 2025, the amendment aims to curb refund abuse and improve tax administration integrity.
- Section 11E now covers underpaid, incorrectly refunded, or wrongly claimed sales tax.
- Taxpayers liable for short-paid tax or inadmissible claims face strict enforcement by FBR.
- Inland Revenue officers can audit, investigate, and issue show cause notices for discrepancies.
- Assessment orders will recover underpaid or wrongly refunded tax, with penalties and surcharges.
- The law emphasizes accountability and applies to both deliberate and accidental misreporting.
- Proceedings do not apply to cases under Section 37A related to prosecution and criminal charges.
- The change aims to improve sales tax compliance and prevent refund mechanism misuse.
- It encourages accurate reporting and discourages aggressive tax planning or manipulation.
Source: pkrevenue.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
