SHC allows supply on securing Sales Tax other levies with collectorate concerned HSD for Byco Tug Boats-Dispute over Exemption

KARACHI: Hearing a petition filed by  BYCO Petroleum company, a customs appellate bench of High Court of Sindh allowed supply of HSD to tug boat of petitioner company on securing amount of Sales Tax and other taxes with the concerned collectorate.

Earlier a counsel from Franklin Law Associates appearing for the petitioner company submitted that the respondents are not allowing the supply of HSD to tug boat “Mallard” deployed at the SPM jetty of the petitioner which  are meant to facilitate safe anchorage of vessel and off-loading of crude oil from the said jetty on pre-text that  it amounts to supply of HSD to third party which is subject to sales tax.

The counsel maintained that supply to tug boats is exempted as per Serial No 4 of Table II of Sixth Schedule of Sales Tax Act 1990. It was further submitted that petitioner is ready to contest the matter before the departmental authorities provided that petitioner is confronted with Show Cause Notice.

The petitioner maintained that in order to ensure smooth off-loading of crude oil, petitioner is ready to secure disputed amount of taxes with the court .

Khalid Rajpar advocate, counsel for Pakistan Customs appearing along with Deputy Collector Muhammad Asim Awan controverted the submissions by the counsel for petitioner and sought time to file comments. The counsel for customs argued that supply of HSD to the petitioner’s tug boat is not exempted from the sales tax and other charges as such exemption is available only in respect of  raw materials and intermediary goods consumed in house for manufacture of goods subjected to sales tax.

The bench after hearing the sides while ordering issuance of pre-admission notices for April 06 sought comments by next date. The bench also asked the respondents to consider the request of the petitioner to allow supply of HSD subject to securing of disputed amount of sales tax and other levies with collectorate concerned.

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