KARACHI: The government has been urged to carry out changes in sales tax rates on petroleum products through parliament.
According to budget proposals 2017-18 received by the Federal Board of Revenue (FBR), it is stated that the federal government may, by notification in the official Gazette, declare higher or lower rates of sales tax in respect of any taxable goods, provided that the bill for such change has been passed by the Majlis-e-Shoora.
From July 01, 2016 to date, there have been around half a dozen notifications for changing the rates of sales tax on petroleum products. The rates have varied from 0 percent to 36.5 percent during this period.
The Supreme Court of Pakistan took a suo motu notice for a similar notification on June 21, 2013 and held that federal government had no authority to levy and recover sales tax without getting the respective bill passed from the National Assembly.
Given the Supreme Court’s verdict on the subject matter, questions arise as to whether the frequent changes in the rates of sales tax for petroleum products are maintainable under law.
Moreover, so many changes on such frequent notice are in itself a challenge for industries who have to go through a lengthy systematic implementation process, each time such rates are notified.
