LAHORE, May 30: Exporter enjoying duty remissions are entitled to buy electricity without paying sales tax, the Lahore High Court held on Thursday.

The ruling came on a petition moved by a textile mill against the Central Board of Revenue’s refusal to extend it the benefit of the scheme in respect of sales tax on power consumption despite being a manufacturer of exportable goods. The federal government, through Custom Rules, 2001, allowed exporters to purchase raw materials and other input taxable goods for manufacture of goods meant for export without payment of customs duty, sales tax and central excise duty. The petitioner mill was allowed the benefit of the scheme in respect of all impositions except sales tax on power bills.

Advocates Ali Sibtain Fazli and Nasar Ahmad argued on the petitioner’s behalf that there was nothing in the scheme to deprive the mill exemption from sales tax on power bills. There was no distinction between electricity and other inputs used for manufacturing the end product intended for export.

Justice Jawad S Khwaja, who heard the petition, agreed that there was no justification for disallowing the petitioner the benefit of the scheme and for demanding sales tax on power bills. The court allowed the tax authorities 30 days to make appropriate arrangements with the Wapda in the light of his decision.