ISLAMABAD: Islamabad High Court (IHC) has issued notices to the Federal Board of Revenue (FBR) and Attorney General of Pakistan to submit comments on the imposition of Federal Excise Duty (FED) on transfer or allotment of immovable properties by developers and builders.

Defence Housing Authority (DHA) Islamabad has challenged the vires of Table-III, First Schedule of the Federal Excise Act 2005.

The respondents are Federation of Pakistan through Secretary Revenue; Chairman Federal Board of Revenue and Commissioner Inland Revenue, Large Taxpayer Office, Islamabad.

FED on allotment or transfer of commercial properties challenged

The appellant is a local authority engaged in sale and purchase of land and performs different functions for the inhabitants of its jurisdictional area.

According to the order of the Chief Justice of the IHC in writ petition number 2672 of 2024, the petitioner contended that through the referred amendment, the Excise Duty on transfer or allotment of properties by developers/ bidders has been imposed.

It was further contended that no corresponding change was made in the charging section of the Federal Excise Act, 2005, and without the same this could not have been done. It was submitted that the Excise Duty is leviable on goods and/or services and the referred transfer does not fall within the said categories.

The counsel pointed out that immovable property does not fall within the domain of the goods; hence the Table-III is ultras vires the Act.

“Notice to the respondents. Since vires of Federal Statute have been challenged, notice under Order 27-A CPC shall also be issued to the Attorney General for Pakistan”, IHC order added.

Copyright Business Recorder, 2024