Pak Customs restrained from en-cashing Sales Tax differential

KARACHI: A division bench of High Court of Sindh on Thursday sought comments and rejoinder from respondent custom officials on or before July 15, the next date of hearing in a petition filed by importers of artificial leather.

The petitioners, importer of the artificial leather moved the court against custom officials of East and West collectorate who moved to get the security amount of differential of Sales Tax lying with the Nazir of SHC.

According to petitioners, represented by Franklin Law Associates, SRO 1125 of 2011 exempts the importers of artificial leather from Sales Tax beside four other sectors. Later SRO 798 of 2017 reduced the exemption to two sectors including “leather” and industrial parts. The customs after this SRO took the plea that as artificial leather was not specifically named in the said SRO, confusion prevails. The East and West collectorate then sought clarification from the FBR. The FBR issued new SRO 777/2018 exempting both the leather, artificial leather.

The respondent custom officials however as per directives from member FBR moved to got the securities en-cashed at which instant petition was filed.

The counsel for petitioner today submitted that SRO 777 of 2018 is beneficial SRO and as per case laws, Fector Belarus and Ayesha Steel Mills case it is a settled law that beneficial SRO will be implemented retrospectively.

The bench after hearing detailed arguments restrained the custom authorities from encashing the securitieswhile seeking comments from respondent by July 15.

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