The joint opposition staged a walkout from Senate on Thursday in protest against the imposition of five percent (general sales tax) GST on petroleum products, terming it a step contrary to constitutional provisions. They urged the government to rescind its decision Pakistan People''''s Party (PPP) Senator Raza Rabbani, who raised the issue, said: "The government decision to increase 5 percent GST is unconstitutional and in total violation of the Supreme Court verdicts."
Rabbani referred to Article 7 and Article 77 of the constitution, saying the Supreme Court has also discussed Sales Tax Act, 1999 and ruled, "It is not the role of the executive to levy tax but the parliament". Responding to the point of order, Finance Minister Senator Ishaq Dar tried to convince the protesting lawmakers but failed. Though there was discussion over the issue, Senate Chairman Syed Nayyer Hussain Bukhari ruled that the debate on legal aspects [SC judgements, constitutional provisions] be held on Monday.
"We would have to cut the development fund if had not taken this decision," Dar said to justify the decision while saying, "We should keep in account debt servicing, salaries of employees, Defence and Operation Zarb-e-Azb before making any statement." He said that Rs 30 billion has already been spent in the ongoing military operation and according to an estimate $1 billion would be needed for rehabilitation of internally displaced persons [IDPs].
Dar referred to the terrorist attack on Army Public School in Peshawar last month and response of the political leadership in the form of National Action Plan and said "Rapid Response Force and additional police battalion would need another Rs 30 billion." The minister recapitulated cut in prices of petroleum products during the last five months and said the people were given relief of Rs 400 billion." He referred to Rs 68 billion revenue deficit and said decision of 5 percent GST would help the government collect merely Rs 17.5 billion in next five months.
Contesting the argument on legal ground, Dar referred to sub-section 2(b) of section 3 of Sales Tax Act, 1999 said the government had not done anything illegal. "I did not have any other tool available except taking this decision," the finance minister said while asking the opposition to keep national interest in view. The ministry also said that the government had absorbed increase in POL products when prices in international markets went high.
This Act has been used by the previous government of Pakistan People''''s Party (PPP) as well as several governments in the past, he added, and the PML-N had taken nothing ultra constitutional. "If something went wrong during our time should be equally condemned and I do that," Rabbani said while asking the government to challenge the SC judgements which were holding field.
Rabbani said that the ruling PML-N, in its manifesto, has promised not to go for indirect taxation but after coming to power it had taken decision violating its own manifesto. "It [POL] is perhaps only commodity in Pakistan''''s history on which such a high GST has been imposed," he added.
Senator Kamil Ali Agha from the PML-Q said that prices of petroleum products have been reduced by 56 percent since June last year but the relief passed on to people was not more than 14 percent. "The government has failed to control price hike and has therefore imposed new GST," he added. Senator Kalsoom Parveen said that no tax can be levied without the approval of parliament and if the government can start taking such a decision, there is no use of democracy. Senator Saeedul Hassan Mandokhail asked the finance minister to give assurance that the 5 percent GST would be reduced when prices in international market would go up. He said that "a tax was imposed on petroleum products in 1970 due to floods in East Pakistan but we are paying that tax till date."
SECURITIES BILL, 2014 Sheikh Aftab, State Minister, introduced ''''The Securities Bill, 2014'''' in Senate. The bill provides to amend and consolidate law for the regulation of the securities industry and protection of investors. The chair referred the Bill to the committee concerned of the House for consideration.
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