PHC stops FBR from collecting 17% sales tax on steel mills’ electricity bills in ex-Fata, Pata

PESHAWAR: The Peshawar High Court (PHC) on Wednesday stopped the Federal Bureau of Revenue (FBR) from collecting 17 percent sales tax in the monthly electricity bills from the steel mills located in the erstwhile Federally Administered Tribal Areas (Fata) and Provincially Administered Tribal Areas (Pata).

A division bench comprising Justice Roohul Amin Khan and Justice Naeem Anwar issued the stay order in a writ petition filed by ZK Steel Mills and others.

The bench also issued notice to FBR and commissioner Inland Revenue, directing them to submit comments in the case before the next hearing.

During the hearing, Asaac Ali Qazi, counsel for the petitioners, submitted that the erstwhile Fata and Pata areas were exempted from all taxes. He pointed out that the federal government had first issued a notification last year imposing taxes in the former Fata and Pata. However, he said the PHC later declared imposition of taxes in these areas as unlawful and void.

The lawyer pointed out that in the recent financial budget for the year 2019-20, the federal government had imposed 17 percent sales tax in the electricity bills of steel mills industry in Fata and Pata. He submitted that the decision was not only illegal, but also in violation of the superior court’s orders. The bench, after preliminary hearing, stopped the FBR from collecting sales tax on electricity bills of the steel mills sited in Fata and Pata and sought reply from the respondents at the next hearing.