Airport Co-op Housing Society: Residents challenge ‘extra’ tax

Residents go to court against paying the 2% tax that the government wants to apply on all property deals.

RAWALPINDI: The residents of a cooperative housing society have gone to court against paying a two per cent tax that the government wants to apply on all property deals.

The employees and residents of the Airport Cooperative Housing Society in Rawalpindi filed a writ petition in the Lahore High Court, Rawalpindi to challenge the orders dated July 8, 2010.

The new tax is called the Capital Value Tax, imposed by the chief inspector of stamps of the Punjab board of revenue and the district officer of cooperatives. It varies from Rs12,000 per kanal in residential areas to Rs60,000 in commercial parts.

Abdul Wahid Qureshi was the lawyer representing the residents. He argued that according to the Punjab Finance Act’s 2010 sections 3 and 6, the housing society was exempt. “A cooperative society does not fall within the definition of an individual, an association of person, a company, a political sub division or an international government,” he argued. A cooperative society is classified as a body corporate for some purposes and it has not been included in the definition of a person in the law.

Qureshi maintained that the society was a distinct entity and its members were shareholders as defined by the cooperative societies law of 1925. Thus, when a member of the society transfers a plot, it is not described as a transfer of property.

Justice Mamoon Rashid Sheikh asked for the chief inspector of stamps, the district officer and the Punjab finance secretary to file comments in two weeks.

Published in The Express Tribune, January 13^th, 2011.