- The Federal Board of Revenue (FBR) has failed to address the legal issue of charging further sales tax or extra tax on items exempted from sales tax.
- Lack of coordination between FBR Member Inland Revenue (Policy) and FBR Member Legal has led to prolonged litigation on this matter.
- The issue is pending in different courts due to the absence of clear legal clarification from FBR Member Inland Revenue (Policy) and FBR Member Legal.
- The FBR has to implement the judgement of the Lahore High Court (LHC) that exempts taxpayers (flour mills) from paying further sales tax or extra tax on items exempted in the Sixth Schedule of the Sales Tax Act, 1990.
- The issue arose from the chargeability of extra sales tax and further sales tax by power distribution companies from flour mills.
- The FBR Inland Revenue (Policy) was requested to issue guidelines on the charge of further tax and extra tax by electricity distribution companies based on court judgments.
- The tax department has filed an Intra-Court Appeal (ICA) against the judgment of the Single Bench of LHC, arguing that the judgment is based on presumption and fails to understand the law.
- The ICA was dismissed by the Division Bench of LHC, stating that the single judge had addressed the concerns of the appellant by stating that the respondent is not obliged to pay further tax and extra tax.
Source: brecorder.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
