Fatwa #309526 May 2001United States of America
Is it permissible for me to recover the full amount of R57.00 from the Customer?
Question
From November 1, 2000, the FNB began to levy a charge of R50.00 + vat on customers who deposit cheques into their account which are returned unpaid. If a customer gives me a cheque of R200 which is returned unpaid due to insufficient funds or some other reason, the bank will debit my account with R57.00 (R50.00 + 7.00 vat). Is it permissible for me to recover the full amount of R57.00 from the Customer? It should be noted that most businesses reclaim the vat on bank charges when submitting their vat returns.
Answer
It is permissible for you to recover the full amount of R57.00 (Bank charges + VAT) from the customer. In such a situation, the dealer cannot reclaim the VAT of R7,00 as VAT returns. Alternatively, the dealer may recover only R50,00 (Bank charges) from the customer and reclaim the R7,00 as VAT returns.
and Allah Ta'ala Knows Best
Mufti Ebrahim Desai
and Allah Ta'ala Knows Best
Mufti Ebrahim Desai