KARACHI: The Sindh High Court (SHC) has ruled the capital gains tax levied on share sales as unlawful, and also directed the Federal Board of Revenue to refund the taxpayers’ money.
The court, in its decision on the petitions filed by Karachi-based shareholders, declared that the capital gains made on the disposal of shares during the fiscal year of 2014-15 could not be brought to tax, if such shares had been held for a period of 12 months or more as on the date of disposal.
“Any tax levied, paid or collected in any manner whatsoever in respect of any capital gains… was unlawful and is liable to be quashed and set aside with the result that the taxpayer shall be entitled to suitable refund/adjustment in respect of any such tax as has been paid or collected,” said the ruling.
However, the FBR denied the tax incidence as retrospective (which was alleged by the brokers) in its reply submitted to the SHC.
The contention that the amendments made vide Finance Act 2014 would be applicable in respect of those shares/securities which are purchased on or after the first July 2014 is not based on correct legal premise, the tax authority told the court.
