The Federal Board of Revenue (FBR) Thursday conveyed to Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) that the Lahore High Court (LHC) has upheld the constitutionality of the Income Support Levy at the rate of 0.5 percent on the value of net movable assets/wealth levied through Income Support Levy Act, 2013. In this regard, the FBR has issued instructions to the Chief Commissioners of LTUs/RTOs here on Thursday.
According to the FBR, the constitutionality of the Income Support Levy at the rate of 0.5 percent on the value of net movable assets/wealth levied through Income Support Levy Act, 2013 was challenged through the petitions. Lahore High court, vide judgement dated 17-06-2016 in WP No 19763 of 2013 while upholding the constitutionality of Income Support Levy Act, 2013 has dismissed the petitions. In this landmark judgement, court has enunciated the following principles:
Firstly, the preamble of a statute does not determine the true nature and merit of a statute and is merely a window into the substantive provision of a statute and anything expressed in the preamble will not impact upon the construction to be put on the substantive part of a statute. Secondly, the term ''Capital value of asset'' was held to be broad-based by encompassing and including within it the terms ''net asset'' or net movable assets'' as used in the Act, 2013.
Thirdly, the tax is common burden for raising revenue and upon collection becomes part of the Federal Consolidated Fund and public revenue of the State whereas, fee on the other hand is exacted for a specific purpose for rending services or providing privilege to particular, individual or a class or a community or a specific area.