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SC declares 1% GST before approval as null and void

SC declares 1% GST before approval as null and void

Faiza Israr

ISLAMABAD: The Supreme Court declared the 1% increase in general sales tax (GST) introduced as part of the budget 2013-14 null and void.

The decision was announced by Chief Justice of Pakistan Iftikhar Muhammad Chaudhry. The apex court took suo motu notice of the collection of GST at rates proposed in the budget even before the parliament passed the Finance Bill 2013 and the president signed it.

On the directive of the Federal Minister for Finance Mohammad Ishaq Dar, Chairman FBR Ansar Javed has directed all LTUs and RTOs to strictly monitor that no sales tax is collected on essential items exempt under section 13, read with Sixth Schedule of the Sales Tax Act 1990 and has directed them to take proper action under the law against violators.

Giving views about the court decision and FBR statements, source told Customs Today that initially the bill was not approved by the parliament but it was being given to FBR to start work on it. He added actually we always collect revenue under the Provisional Collection of Taxes Act 1931 and there were no amendments in it since then so the court declared the collection under this act as null and void. We started collecting tax as SRO509/2013 which is yet to be approved by the parliament. He also clarified there is no other way of reimbursement, we had stopped the collection but we will start again after approval and also add all the previous collections.