IHC ruling to pave way for implementation of FBR track, trace system

ISLAMABAD: The Federal Board of Revenue (FBR) faces no more impediments in implementing its Track and Trace System (TTS) in the tobacco sector after the Islamabad High Court (IHC) dismissed all petitions challenging the system.

The tobacco sector possesses a huge potential to fetch revenue.

In its verdict, the court observed that the writ petitions filed by Universal Tobacco, Sarhad Cigarettes Industry, Paramount Tobacco Company and others were without merit and were accordingly dismissed. The court observed that the competence of the federal government to levy a tax came up for consideration wherein the Supreme Court held that the levy of tax for the purposes of the Federation was not permissible except by or under the authority of Act of Majlis-s-Shoora (Parliament).

The order said it was a well-known fact to all persons concerned with the matter that tax evasion in the country was a common phenomenon for multiple reasons, and the Federal Board of Revenue in particular and the government in general had been and were still wrestling with the activities and segments of businesses, who otherwise fell within the ambit of the sales tax regime to bring them into the tax net and reduce evasion. One such attempt was the introduction of Track and Tracing System (TTS) with respect to certain goods by virtue of section 40C(1).