PHC directs govt to explain position on tobacco tax

PESHAWAR: The Peshawar High Court (PHC) on Tuesday directed the provincial government to respond to the writ petition of the cigarette-manufacturing companies filed against the imposition of the provincial excise duty on tobacco.

A two-member bench comprising Justice Shakeel Ahmad and Justice Fazal Subhan heard the petition. Barrister Mohammad Ibrahim Khan and Shahab Hussain Advocate represented the Pakistan Tobacco Company and Philip Morris International Tobacco Company respectively.

Barrister Ibrahim told the bench that the provincial government imposed excise duty on raw tobacco at the rate of Rs50 per kg in the provincial budget for the financial year 2024-25. He said the federal government was already collecting Rs390 per kg under the head of federal excise duty. He said that there was no such tax in other provinces, adding that it was in violation of the Article 142 of the Constitution when a certain tax was being collected by the federal government so the provincial government could not impose a similar levy. He said that the petitioners were compelled to pay tax to the federal as well as the provincial government.

He said the provincial government had started stopping the vehicles of the cigarette-manufacturing companies loaded with tobacco in a bid to collect the tax without serving any notice on them. The lawyers said that such steps of the provincial government were detrimental to investment in the province.