Govt restrained from taking action against tobacco company

PESHAWAR: The Peshawar High Court (PHC) on Friday restrained the provincial government from taking action against a cigarette-manufacturing company.

A two-member bench comprising Justice Shakeel Ahmad and Justice Fazal Subhan heard the writ petition. The cigarette-manufacturing company had moved the high court against the imposition of the provincial excise tax in the Khyber Pakhtunkhwa budget for 2024-25. The petition was filed through Babar Khan Yousafzai Advocate.

The lawyer told the court that the Khyber Tobacco Company already paid Rs4 billion tax annually but now the government had introduced the provincial excise duty, which would affect their business and investment in the province. Babar Khan Yousafzai said that the company was paying various types of taxes. He said that hundreds of people were working in the tobacco industry.

The bench was told 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. The federal government was already collecting Rs390 per kg under the head of federal excise duty, the lawyer said, adding that there was no such tax in other provinces.

He said it was in violation of 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.