LAHORE: A polyester staple fibre (PSF) manufacturer has failed to secure blanket cover of the law on protection of economic reforms to all the exemptions availed against the excise duty, sales tax and customs duty, said Federal Board of Revenue (FBR) sources.
The manufacturing company had challenged certain exemption notifications while relying on the law related to the protection of economic reforms, they added.
According to the sources, the manufacturer was under a wrong perception that those notifications not directly coming within the scope of protection of economic reforms law were nonetheless protected. Therefore, the benefit conferred by the disputed notifications could not be altered to the disadvantage of the investors.
They said the tax department was, on the other hand, possessed with the view that the law is undoubtedly intended to provide powerful protection to investors as regards fiscal incentives for investment.
In the end, however, each notification that is sought to be given the cover of the law related to protection of economic reforms must come within the scope of the relevant provisions.
According to the sources, the relevant law defines economic reforms as economic policies and programmes, laws and regulations announced, promulgated or implemented by the government on and after the seventh day of November, 1990, relating to privatization of public sector enterprises, and nationalized banks, promotion of savings and investments, introduction of fiscal incentives for industrialization and deregulation of investment, banking, finance, exchange and payments systems, holding and transfer of currencies.
They said the protection of fiscal incentives for setting up of industries applies only to those laws, regulations etc as we’re announced, promulgated or implemented on and after 7th November 1990.
The sources said it is not at all surprising that a business concern looks at fiscal regime, both direct and indirect taxation, in which it operates holistically and commercially. For a business, it is a bottom line that matters, tending to take and treat the entirety of its tax situation as a whole.
Copyright Business Recorder, 2023