ISLAMABAD, May 1: Federal Tax Ombudsman Justice Saleem Akhtar has asked the tax officials not to collect sales tax on the sale of scrap.

The FTO said that sales tax was not chargeable on the sale of scrap as clearly held by the Appellate Tribunal.

The decision was taken on the complaint of the Pakistan Mineral Development Corporation, Hyderabad, which complained against the tax officials for charging sales tax on the sale of scrap.

The ombudsman observed that the department had completely ignored the basic fact that there was no liability of tax on the sale of scrap, but issued notices to the complainant for recovery of additional tax.

The justice said that there was no evasion of sales tax, no shortfall in its recovery and the demand for additional tax and penalty has no justification.

The FTO asked the CBR to set aside the order passed by the deputy collector (adjudication), Hyderabad, and submitted a compliance report to this office within 30 days of this order.