LHC declares move to charge GST from lawyers illegal

LAHORE: Justice Tariq Saleem Shaikh of the Lahore High Court, Rawalpindi Bench, has declared illegal the move to impose general sales tax up to six thousand rupees on electricity bills of lawyers chambers.

The Lahore High Court, Rawalpindi bench, while hearing a petition related to the application of monthly general sales tax up to 6,000 rupees in electricity bills on lawyers chambers, declared that under Clause 3(9) of the proposed act, the general sales tax was applicable only on retailers and the decision was issued in haste to recover the sales tax.

The court further ordered that the wrongly collected sales tax be returned to the lawyers. The court directed the petitioner to submit the complete list containing addresses, national identity card or NTN number, bar license number and electricity connection reference number of the lawyers to the commissioner Land Revenue.

The court, in its three-page judgment, stated that under Section 3 and sub-section 9 of the Sales Tax Act, 1990, this tax is collected only from the retailers or it is collected as a fixed tax in the electricity bills from the persons named under Section 181-A of the Income Tax Ordinance 2001. According to the law, the persons who supply goods of daily use and necessity to the public are in the category of retailers.

While lawyers, being professionals, provide legal services to their clients, thus the supply of goods does not fall within the category of Section 3(9) of the Act, in this context neither sales tax is applicable to lawyers nor can be collected, so lawyers need accuracy in the bills issued in July.

The judgment said that secretary Sales Tax Policy, FBR, has assured the court that commissioner Land Revenue will direct DISCOs through a letter to exclude names of lawyers from sales tax category.