Taxation

FBR member policy asked to assist the court

Lahore High Court (LHC) has summoned Member Policy, Federal Board of Revenue (FBR) to appear before the court on May 21, 2019 to assist it regarding the taxation system on the supplies originating from Azad Jammu & Kashmir (AJK). LHC issued these orders in response to a petition filed by Ruby Foam Industries (Pvt) Ltd., in which FBR has been made a respondent.

On the occasion of hearing of the petition held on April 30, 2019, Chief Tax Policy was present but he was unable to reply the queries by court satisfactorily, the court order stated.

The court observed that FBR was unable to tax the supplies originating from AJK by replying simply that these are not imports. The counsel for petitioner appraised the court that certain measures have been taken to tax the supply of tobacco products through tracking system but the same monitoring system is not being applied on other supplies including supply of foam to the distribution and retailers in Pakistan by manufacturers at AJK, who are exempted from payment of sales tax.
The court directed Member Policy FBR to assist the court in this regard to protect the interest and rights of local taxpayers and fixed the next hearing for May 21, 2019.

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