The Lahore High Court (LHC) has barred the Federal Board of Revenue (FBR) from fixing the minimum value on the supply of sugar.
The FBR has been stopped from the annual practice where the FBR fixes the minimum value on the supply of sugar for the purpose of the calculation of the sales tax every year.
The LHC order said that till the next date of hearing the proceedings before the FBR regarding the determination of the value of the supply of sugar will remain suspended. Thus, the FBR will not fix the said price of the commodity till the final decision of the court. The court has fixed January 17, 2023, as the next date of hearing.
The sugar mills informed the court that the FBR is not empowered to fix a notional value that is completely different from the currently prevalent market value. This impinges upon the rights of the petitioners to conduct their business and trade in terms of Article 18 of the Constitution.
PSMA had proposed that there should be no minimum value for the fixation of sugar. Furthermore, input/proposals have been again sought by the FBR for sugar value fixation.
The industry pleaded that the FBR cannot exercise unbridled, unstructured, and discretionary power under proviso to section 2(46) of the Sales Tax Act to fix ex-mill sugar value.
The rate of sugar is not uniform throughout the season/country and in fact, fluctuates on a monthly and even weekly/ daily basis and may vary on the same day within the same/different cities making all such efforts to fix a uniform or notional price of sugar (even for purposes of sales tax calculation) arbitrary, absurd, discriminatory, and unreasonable, the PSMA added.
