KARACHI: The Sindh High Court (SHC) has dismissed a petition against Pakistan Customs for denying the petitioner benefit of SRO 1125(I) 2011, levying 17 percent sales tax on import of industrial raw material.
Petitioner Farrukh Mirza moved the high court, submitting that he had imported several consignments of cellulose acetate tow from December 2013 to April 2014 and got them cleared after paying duty and taxes including sales tax charged at reduced rate of 2 percent under the SRO 1125(I)2011.
He submitted that he imported the same material in June 2014 and paid duty and taxes, and claimed the benefit of above-mentioned SRO classified under PCT heading 5502.0090. The consignment was released after he made payment of duty and taxes.
However, he said, the deputy collector of Research Development wing of Model Customs Collectorate detained the consignment, ordering re-examination of the consignment. After fresh assessment, the petitioner was asked to pay 17 percent sales tax, 3 percent additional tax and 5.5 percent income tax at the import stage. He said he was denied the benefit of the SRO and the customs staff assessed sales tax at the rate of 17 percent.
The petitioner, therefore, pleaded with the court to declare that the material imported by the petitioner classified under PCT heading 5502.0090 comes within scope of SRO 1125(I)2011. The court was further prayed to declare that the petitioner is liable to pay sales tax at the reduced rate of 2 percent and demand of sales tax at the rate of 17 percent is illegal and unlawful.
A division bench of SHC observed that according to the SRO the rate of sales tax at the import stage varies from 2 percent to 17 percent depending on use of such imported material. The petitioner has not challenged vires of the SRO. Therefore, no case to interfere under article 199 of the Constitution is made out.
