LAHORE: The Lahore High Court (LHC) has accepted an appeal against the collection of five percent sales tax on the import of ginned cotton to hear and sought reply from Federal Board of Revenue (FBR) on December 6, 2016.
Justice Abid Aziz Sheikh heard the case filed by the Habib Waqas Textile Mills. During the hearing, counsel for appellant, Muhammad Mohsin Virk, argued before the court that ginned cotton is exempted from sales tax according to a Statutory Regulatory Order (SRO) of FBR.
The SRO makes it clear that cotton is exempted from taxation, but five percent sales tax is being collected from importers despite the exemption, that is illegal and a burden on taxpayers, the counsel added.
Mohsin Virk also provided decision announced by the Sindh High Court (SHC) as reference and argued that sales tax collection on import of ginned cotton has also been declared null and void by the court.
He appealed the court to direct the tax officials for implementation of SRO and barred them from collection of five percent sales tax.
After hearing the arguments of appellant, the court issued notice to the FBR and sought reply on the appeal.
