ISLAMABAD: The Supreme Court will determine whether charitable institutions running religious schools, hospitals, or some kinds of businesses in Karachi could be subjected to extra taxes levied on the bill amount, excluding federal taxes on the supplies of electric power and natural gas.

Headed by Justice Syed Mansoor Ali Shah and consisting of Justice Muham­mad Ali Mazhar and Jus­t­ice Athar Minallah, the bench on Monday took up a set of challe­n­g­­es moved by almost 18 charitable organisations assailing the Sindh High Court (SHC) judgement of August 24, 2023, rejecting similar pleas.

The Supreme Court, however, stayed the SHC judgement but decided to resume the hearing on a day-to-day basis from June next.

In one of the joint petitions, Messers Dawat-e-Hadiya, Messers Saifiyah Girls Talim Trust and Mes­sers Syedna Taher Saifud­din Memorial argued that these organisations did not provide taxable supplies and were not involved in any taxable activity within the framework of the Sales Tax Act 1990; therefore, extra tax cannot be levied.

The petitioners challenged the imposition of extra sales tax through an SRO issued by FBR under Section 3(3) of the Sales Tax Act 1990 on electricity and natural gas bills. These impositions were made on the pretext that the petitioners were neither registered under the 1990 act nor on the “active taxpayers list”.

On the other hand, the SHC had held that the extra tax has been levied on the supply of electric power and natural gas and not on the activity or business of the petitioners from which any exemption could be claimed on the ground that they were not engaged in any taxable activity.

Published in Dawn, April 30th, 2024