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M/s Rabia Trading Co moves SHC seeking benefit of zero-rating on textile products

M/s Rabia Trading Co moves SHC seeking benefit of zero-rating on textile products

KARACHI: Muhammad Naveed, proprietor of M/s Rabia Trading Company, approached the Sindh High Court (SHC) seeking benefit of zero-rating of sales tax and 1% income tax and release order of textile fabric consignments seized by customs officials.

On December 6, 2018, counsel for petitioner stated in his constitutional petition that petitioner imported 26 consignments of textile fabric and filed 07 goods declarations (GD) on subsequent dated and the goods declarations of the remaining 19 consignments are to be filed and claimed benefit of zero rating of sales tax and 1% income tax as per concessionary notification SRO 1125(1)/2011 dated 31/12/2011 as amended vide SRO 777(1)/2018 dated 21/06/2018 import stage by virtue of being registered as manufacturer of textile products.

Counsel further stated that in-spite of the fact the status of the petitioner as manufacturer has been re-verified by the concerned authorities vide physical verification report dated 05/10/2018. The subordinates of the respondents are continuously visiting the premises of the petitioner on the pretext of physical verification of manufacturing facility and harassing the petitioner and his staff for which they are not legally authorized and are bound to accept the status determined by the concerned authority, he stated.

He submitted that during the examination, petitioner was not allowed the benefit of exemption of sales tax being registered as manufacturer of textile products and goods was assessed at 9% sales tax and 3% income tax by charging the status from manufacturer to commercial importer and accordingly the assessment was completed by denying the benefit of SRO 1125(1)/2011 to which the petitioner is legally entitled under the law.

Citing Secretary Finance, Collector Appraisement West, Additional Collector Appraisement West and others as respondents, petitioner pleaded the court to direct them to release his consignments immediately illegally detained by customs officials.

Counsel further pleaded the court to direct them to collect the sales tax and income tax at import stage on the basis of the registration certificate issued by concerned sales tax authorities under section 14 of the Sales Tax Act, 1990.