Increase in GST on petroleum products challenged in SC

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The increase in the General Sales Tax (GST) on petroleum products by the government has been challenged in the Supreme Court.

Shahid Orakzai on Monday filed a petition in the apex court under Article 184(3) of the Constitution. Making the federation, through secretary Ministry of Law and Justice and Chairman Oil and Gas Regulatory Authority (OGRA) as respondents, the petitioner requested the court to immediately restrain the federation from collecting the extra GST until a decision is reached on the petition.

The petitioner also prayed the court to declare the increase in sales tax on petroleum products as illegal under the law and direct OGRA to re-evaluate the price of petroleum products under the standard GST.

He questioned whether a tax imposed by a federal law could be increased without amending the law and whether the rate and percentage of GST can be increased specifically for a particular group of products, without moving a Money Bill in the National Assembly as required under Article 73 of the Constitution, wherein clause (2)(a) provides for ‘imposition, abolition, remission, alteration or regulation or any tax’.

Further, the petitioner contended that the GST under the law should be a uniform as it applies to all the products at a general rate and cannot vary from product to product.

“The latest increase from 17 per cent to 27 per cent, the Sales Tax on petroleum products is no more a General Tax but has now become a Special Tax,” said Orakzai adding that, “There is no Act of Parliament which could impose or levy any Special Sales Tax exclusively on petroleum products.”

On January 31, the government raised GST by five per cent, increasing if from 22% to 27%.  Earlier on January 1, government had increased GST by five per cent, from 22% from earlier rate of 17%.

Regardless of purpose or intention, the increase or ‘alteration’ in GST is utterly unconstitutional and absolutely illegal, the petitioner argued.