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A division bench of Sindh High Court has granted a stay in a constitutional petition filed by Tameer Microfinance Bank Limited against the recovery of Rs 80.782 million as Federal Excise Duty (FED) on services. The bench comprising Justice Aqeel Ahmed Abbasi and Zafar Ahmed Rajput has ordered the issuance of notices to the respondents as well as Attorney General for Pakistan (AGP) in terms of section 27-A of the C.P.C. as the petitioners intend to challenge the application of Federal Excise Act on the case of petitioners after the 18th amendments.
April 16 has been fixed as the next date of hearing when the comments will be filed by the respondents. The counsel for the petitioner, Naveed-ul-Haq, submitted that the petitioners are being charged Federal Excise Duty on services although provinces, after 18th Amendments, have imposed sales tax on services; hence the same amounts to double taxation. He referred to notice under section 14 of the Federal Excise Act, 2005 read with section 7 of the Federal Excise Act, 2005 read with S.R.O. 550(I)/2006 of June 5, 2006 issued by the Deputy Commissioner Inland Revenue , Karachi, wherein an amount of Rs 80.782 million has been demanded from the petitioners.
In the meantime, the order said the petitioners may respond to the notice issued by respondents and to attend the proceedings before the concerned department, however, till next date of hearing no coercive action for the recovery of the impugned amount shall be taken against the petitioner. If the petitioners do not proceed with the matter on the next date of hearing, the interim order passed today (3.4.2014) may be recalled. The respondents in the petition are: Federation of Pakistan, Chief Commissioner, Inland Revenue, Large Taxpayers Unit, Karachi, and Deputy Commissioner, Inland Revenue, E&C, Unit-02, Range-A, Zone-II, Karachi.

Copyright Business Recorder, 2014

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