A petition has been filed in the Supreme Court’s Lahore Registry challenging the imposition of 15 percent regulatory duty by the federal government on imported paperboard that inflated the papers prices in the country. Khawar Paper Mart and other paper firms filed the petition, pleading that the government, through the Finance Ministry and Federal Board of Revenue, benefited certain companies with regulatory duty that led to an increase in paper price. They contended that the imposition of regulatory duty on paperboard was wrong, as it was used for production of packing cartons and manufacturing and binding of books, therefore, paperboard could not be termed as a luxury/non-essential item.
The petitioners alleged that the act of respondents created unhealthy competition in the market and only benefited Century Paper Mills, who manufactured 80 percent of goods discussed in the petition.
They submitted that the federal government through a notification dated February 3, 2009, included the paperboard besides other items in the ‘non-essential/luxury items’ list and made subject to 15 percent regulatory duty. They said that due to imposition of the said duty, the prices of the paperboard and other paper products became much higher and revenue declined because of drastic reduction in import.
The petitioners said that the industrial and commercial importers agitated and registered their protest through the chamber of commerce and other forums against imposition of regulatory duty. However, through another notification dated June 13, 2009, the government retained duty on paperboard among other items, they added. They submitted that another reason claimed for imposition of duty was threat to local market in case of cheaper imports. They contended that the local industry could be protected through National Tariff Commission Act 1990, whereby the commission had to conduct detailed inquiry, consultations with all stakeholders before making recommendations to the federal government for tariff.
Petitioners said that even if the fears of reduction in prices in the international market were accurate, it did not justify levying regulatory duty under the head of luxury/non-essential items. Hence, the impugned notification has been issued with malafide intension to give the benefit to one group, they added. They prayed the court to declare the notification issued for imposition of regulatory duty on paperboard illegal and against fundamental rights of the petitioners.
