Raise in GST rate: CJP terms British-era law violative of fundamental rights

The Supreme Court on Wednesday questioned the ''Declaration'' proposed by the Federal Board of Revenue (FBR) through Finance Bill 2013 to raise General Sales Tax from 16 to 17 percent without approval of the Parliament. A three-judge bench led by Chief Justice Iftikhar Muhammad Chaudhry termed Provisional Collection of Taxes Act 1931 violative of fundamental rights, saying citizens'' rights "cannot be exploited under Article 19 of the Constitution".
During the course of proceedings, the Chief Justice remarked that the Declaration required to be amended because "Article 70 clearly states that only Parliament is empowered to impose taxes. He added that the court would review the legality of the amended Declaration. Attorney General for Pakistan (AGP) Munir A. Malik told the bench that Federal Finance Secretary was in contact with the Finance Minister over the current matter.
According to the Chief Justice, interim tax cannot be imposed without the approval of Parliament. He further observed that while the government could not function without collecting taxes yet it was the executive''s responsibility to follow the procedure. The Chief Justice inquired why notification relating to exempting items of daily use from the levy of GST was not issued by the concerned authority. To which, the AGP responded that the government had issued the relevant notification.
He also told the bench that the Federal Finance Minister had directed the FBR to inform the general public through all appropriate means about exemption of tax on essential items. The court was informed that as per Section 13, read with the sixth schedule under the Sates Tax 1990, such as vegetables, meat, milk, eggs, red chillies, fish, drugs, pulses, fruits, poultry, ginger turmeric, cereals and products of milling industry, ice, poultry feed, butter, sugarcane, yogurt, butter, infant milk preparations, salt potato, onions, bread, nan, chapatti, bun, rusk & others continue to remain exempted from Sales Tax and that the increase in the rate of Sales Tax from 16 to 17 percent under the Declaration issued under the Provisional Collection of Taxes Act 1931, does not affect any of the items, which are exempted under the Sales Tax Act, 1990. The AGP submitted that the government was empowered to impose tax under the Provisional Collection of Taxes Act 1931. The Chief Justice queried the government''s decision to burden the masses through enforcing a law legislated during the British rule.
"How is it possible to recover tax from an unregistered petrol pump given that as many as 90 percent of unregistered petrol pumps are collecting money from consumers but not depositing it in the national kitty," the Chief Justice inquired from FBR counsel Shamim Rana. The Chief Justice further observed that an increase in petroleum prices had negatively impacted the price of essential commodities. The bench directed Rana to submit a comprehensive report on GST collection before it adjourned the hearing of case till June 20 (today).