GST not applicable on edible, medicines, SC told


ISLAMABAD: Attorney General of Pakistan Munir A. Malik on Wednesday informed the Supreme Court that 70 edible items including cooking oil, peppers, seeds, sugarcane, eggs, fish, fruits and medicines are exempted from General Sales Tax (GST).
A three-member bench of the apex court, headed by Chief Justice Iftikhar Muhammad Chaudhry, heard a case pertaining to one per cent hike in General Sales Tax.The attorney general said that action would be taken against those found receiving GST on food items.

The AG also produced the government directives in the apex court, stating that the GST was not imposed on food items.

He said that the finance ministry has issued directives to the Federal Board of Revenue (FBR) not to collect the increased levy.

Malik said that levy was to be collected under an act of 1931, however, if the apex court considers it against the Constitution, the government could stop implementation of the law in the future, but it’s not possible to reimburse to people the collected amount.

During the proceedings, the chief justice remarked that even the president was not authorised to impose tax as only parliament was authorised to impose taxes.

He also remarked that according to newspapers reports, about 90 per cent business of the petrol pumps is unregistered.

The chief justice said that there is not only raise in petroleum prices but all items for daily usages have also been made costly.

The chief justice also sought an explanation that how it was possible to recover from unregistered companies.

He made it clear that unregistered petrol pumps were defaulter in the view of law but they are imposing undue burden on consumers as unregistered companies were collecting money out of consumers but not depositing in national exchequer.

Justice Chaudhry directed the FBR officials to visit market places and shopping malls to examine that the prices of everything have been increased unscrupulously while poor people are unwillingly bound to pay the amount for things.

The court also directed the FBR and government to take revolutionary steps for security of people from exploitation.

The chief justice questioned as why the government has taken back the notification of 2 per cent additional GST on petrol pumps owners.

He remarked that immediate implementation of the GST could trigger an inflation storm.

The chief justice, while adjourning the hearing till Thursday, ordered the counsel to submit comprehensive report in the court.