In a major victory for Pak Suzuki consumers, President Arif Alvi has upheld the order of the Federal Tax Ombudsman (FTO) to refund the amount of Sales Tax over 12.5%, received from the Suzuki vehicles’ consumers.
Addressing a press conference, FTO official Dr. Asif Mahmood Jah said the president’s order will benefit every consumer who paid an excess amount of Sales Tax for Suzuki vehicles. The official further said that 24 complaints were filed against FBR and a vehicle company in terms of Section 10(1) of the FTO Ordinance 2000. The complaints were filed for charging 17% Sales Tax on purchase of 998cc vehicles in August 2021 against 12.5%, which was the actual rate at that time.
In this way, the taxpayers were constrained to pay more than what was actually due. After deliberation, President Alvi upheld the decision and rejected FBR’s pleas against the recommendation for a refund.
In October last year, consumers emerged victorious in the Suzuki Sales Tax case against the FBR. According to details, FTO asked FBR to direct “the concerned Commissioner-IR to refund the amount of Sales Tax collected over 12.5% from the complainant as per law.”
Background of Suzuki Sales Tax Case
And here is a bit of background of this whole case. Under the new Auto Policy (2021-2026), the federal government reduced the sales tax on all cars to 12.5% from 17%, along with a 2.5% reduction in Federal Excise Duty (FED) from July 1st, 2021. It means all invoices after this date had the new tax reductions. One of the biggest beneficiaries of this policy was Pak Suzuki.
However, reports stated the car manufacturer charged 17% Sales Tax, even after July 1st, as several customers shared their invoices with us. As per those invoices, the company reduced the FED; however, the sales tax remained17%. However, the car company stated it had paid the tax to FBR at the time of bookings; hence, it has no authority in giving back the additional payment, making the FBR responsible.
A number of customers raised the issue with Pak Suzuki; the case went to FBR and then to FTO. And now the consumers have won the final battle as the president has given the verdict in their favor.
We hope that the consumers will get back the extra tax they paid.
What do you think about this verdict? Do you think it is justified? Share your thoughts in the comments section.
