ISLAMABAD: The Supreme Court accepted for hearing on Thursday an appeal filed by the Federal Bureau of Revenue (FBR) against a Sindh High Court order of Oct 18 last year which had set aside the levy of a 75 paise federal excise duty (FED) on every phone call over five minutes in duration.

Headed by Justice Qazi Faez Isa, a three-judge SC bench granted leave to appeal and ordered clubbing together of all identical petitions and fixing them for hearing within one month.

Others on the bench are Justice Yayha Afridi and Justice Jamal Khan Mandokhel.

The case involves levy of excise duty on the telecom sector imposed as federal excise duty at a rate of 75 paise per call if it exceeds five minutes by inserting Clause 6A in Table 11 of the 1st Schedule of the Federal Excise Act 2005 through Finance Act 2021-2022.

Initially, three mobile companies — Telenor Pakistan (Pvt) Limited, Pak Telecom Mobile Ltd and Pakistan Communications Ltd — had challenged the amendment into the Finance Act on different grounds. One of them was that the Constitution’s 18th Amendment had vested the powers of taxation on services in the provinces. They relied on a judgement of the Sindh High Court which had accepted the contentions of mobile companies.

Being an aggrieved party, the FBR challenged the SHC judgement in the Supreme Court through its counsel Hafiz Ahsaan Ahmad Khokhar.

The FBR counsel argued before the apex court that the law relating to imposition of excise duties on telecom companies was amended and inserted by Parliament through Finance Act 2021-2022, as in Clause 6A in Table 11 of the First Schedule of the Federal Excise Act 2005.

Parliament is legally competent and authorised under Article 73 of the Constitution to legislate on any federal subject, the petitioner contended.

The Sindh High Court had ignored the fact that “excise duty” has been mentioned as entry No 44 of Part 1 in the Fourth Schedule, the FBR said. “The (SHC) judgement is not legally maintainable and requires to be set aside.”

The counsel argued that the Federal Excise Act was applicable throughout the country and the Sindh High Court was not justified in making redundant the provisions introduced through the amended Finance Act 2021-2022.

The three mobile companies suggested that all the petitions be clubbed together since identical matters were pending with the apex court.

Published in Dawn, September 30th, 2022

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