SC declares 1% increase in GST null and void

Published: June 21, 2013
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File photo of the Supreme Court building in Islamabad. PHOTO: EXPRESS/FILE

File photo of the Supreme Court building in Islamabad. PHOTO: EXPRESS/FILE

ISLAMABAD: The Supreme Court on Friday declared the 1% increase in general sales tax (GST) introduced as part of the budget 2013-14 null and void, Express News reported.

The decision was announced by Chief Justice of Pakistan Iftikhar Muhammad Chaudhry.

The apex court took suo motu notice of the collection of GST at rates proposed in the budget even before parliament passed the Finance Bill 2013 and the president signed it.

During today’s hearing – the three-judge bench headed by the chief justice – ordered the government to deposit all the money recovered through imposition of additional sales tax to the office of the Supreme Court Registrar.

It also asked the government to take back the additional tax it imposed on petroleum products.

Soon after the verdict was announced, the Oil and Gas Regulatory Authority (Ogra) reversed its decision to increase oil prices through a notification.

The bench had reserved its verdict on June 20 after hearing the arguments of the Attorney General of Pakistan (AG) and the lawyers representing Federal Board of Revenue (FBR) and Ogra.

The government had proposed an increase of the GST from 16% to 17% – a move that was criticised by many as burdening the poorest members of society.

Advocate Rana Shamim had earlier assured the bench that all exempted items such as vegetables, meat, milk, eggs, red chilies, fish, drugs, pulses, fruits and poultry were not taxed with the GST.

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Reader Comments (51)

  • FP
    Jun 21, 2013 - 10:38AM

    Its a very good decision by SC to restict GST to 16%. I hope their decision will be implemented by Federal Government.

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  • Zubair
    Jun 21, 2013 - 10:42AM

    Okaaaaay, see you chief Justice…I will print more Notes now..Ishaq Dar!!!

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  • PakArmySoldier
    Jun 21, 2013 - 10:49AM

    I’m against the proposed GST hike but the Supreme Court has no business running an economy. Who made them the arbiter of the economy?

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  • FAISAL JEELANI
    Jun 21, 2013 - 10:50AM

    If SC decision implemented, then we appreciated.

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  • citizen
    Jun 21, 2013 - 10:58AM

    Prices increased on many things even which were tax exempted . This nation is full of thieves . Good decison by cJ

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  • Imran
    Jun 21, 2013 - 11:05AM

    Meddling in Affairs technically ?

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  • Yousuf
    Jun 21, 2013 - 11:06AM

    Sometimes difficult decisions are necessary for the long-term well being of a country. Taxation is necessary for the maintenance of Fiscal balance and this 1% GST was a good way to increase Pakistan’s revenue receipt. What’s the point of the budget if the Supreme Court is going to overturn every decision?

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  • Lashari
    Jun 21, 2013 - 11:07AM

    Nawaz Sharif ! Another Long March …

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  • Blunt
    Jun 21, 2013 - 11:08AM

    Dear SC!
    Why not to declare the whole GST null and void. May entire budget or even entire government as unconstitutional??

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  • Ali
    Jun 21, 2013 - 11:10AM

    @PakArmySoldier:
    I didnt see your comments when supreme court took notice of increase in CNG prices and restrict to Rs.60 in PPP government.

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  • Shaami
    Jun 21, 2013 - 11:10AM

    Cheif Justice has no knowledge how the economy basically runs?. Now the whole budget figures have to revise and it will have greater repercussions with more borrowings and nothing else. Supreme Courts dont make vital decisions on economy in any developed world.

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  • Zubair
    Jun 21, 2013 - 11:13AM

    I hope that dicision would have come from the parliament, only then can we have “pro people” budgets in future.

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  • Harry
    Jun 21, 2013 - 11:15AM

    What? Since when can any court system in the world can set taxes….

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  • ASQ
    Jun 21, 2013 - 11:21AM

    supreme court is only saying get it passed from parliament which is the proper way simple.

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  • papi
    Jun 21, 2013 - 11:21AM

    Pakistan needs direction taxation. Its needs to impose agricultural tax and have the undocumented economy pay income taxes. It does not need more indirect taxation like GST.

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  • Blunt
    Jun 21, 2013 - 11:21AM

    Seems that PML-N is getting the taste of its own medicine.

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  • Pashtunyar
    Jun 21, 2013 - 11:26AM

    Ishaq dar should ask the supreme Court to prepare the budget! CJ has become a joke!

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  • Fahad
    Jun 21, 2013 - 11:27AM

    Good decision by sc!..if govt want to balance its fiscal budget, it must tax big land owners, agricultrists, traders, industrialists, services sectr etc…refrain from burdoning the already burdened poor& middle class

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  • Zeeshan Hasan
    Jun 21, 2013 - 11:53AM

    SC has no business in this, solve cases stop interfering in Govt affairs. The judge is out of control :/

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  • fz
    Jun 21, 2013 - 11:56AM

    Good decision cut 50 bil from development project

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  • Sunny
    Jun 21, 2013 - 11:58AM

    it means it will be imposed in july now, as far as i know Govt had no authority to collected taxes in june before the budget is approved by parliament so now after the approval of budget from parliament the taxes will be legally applicable.

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  • Raza
    Jun 21, 2013 - 12:17PM

    am glad SC made this decision and hope same benefit will be passed on to the general public and edibles and basic necessity items will get cheaper, I wonder what happened to all the promises that were made by this Government before holding the offices.

    If CJ is retired bye bye to our last hope, I don’t care what he did in past, but I can see what he is doing now for us and our people.
    .

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  • Observer
    Jun 21, 2013 - 12:31PM

    How can the courts suo motu declare a sales tax as invalid? Wherein from the constitution do they derive this power to interfere in government’s taxing and financial authority?

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  • afza
    Jun 21, 2013 - 12:40PM

    we dont want a bullet train but we dont want price hikes either.have mercy on poor pakistanis who were already starving and in the name of relief the govt has overburdened them even more.people could not educate their children now they cannot even feed them.the non-tax payers will find a way out as usual but what of the middle and lower middle classes who have to bear the burnt .

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  • Xnain
    Jun 21, 2013 - 12:40PM

    Dear ET and commentors: It seems as if there is a big misunderstanding. The point of SC is that Government cannot charge new GST rate before the finance bill is approved by the parliament. So its not that SC has ordered the withdrawal of an increase in GST but ordered the government to charge it when the finance bill gets passed from the parliament and not before that I guess.

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  • Babar
    Jun 21, 2013 - 12:43PM

    Oh come on ET. Get some depth in your reporting. SC declared that GST can not be increased without approval from the parliament. So basically they decided against the government’s move of start collecting the additional GST even before the budget was passed.

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  • It Is (still) Economy Stupid
    Jun 21, 2013 - 12:44PM

    SCP is blurring the line of separation of Judiciary and legislative arm of the government. Such decision while Parliament is in budget session shows a disregard for the democracy. If it continues it is time for NS not to grant the extension of top judges. Pakistan is “A” grade country and America and Allah are obligated to provide finances to her.

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  • huzzee
    Jun 21, 2013 - 12:47PM

    Bouncer from SC…! :-P Hail CJ..

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  • Saqib
    Jun 21, 2013 - 12:52PM

    The SC decision is that no additional taxes can be imposed/collected without approval of finance bill 2013 before the Parliament instead.

    Federal government will collect this 1% or whatever increase in GST/taxes from July 1 provided the Parliament approves it.

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  • AliKuliKhan
    Jun 21, 2013 - 1:14PM

    The SC decision is no big deal. It only stops collection of sales tax at a higher rate before it is approved by the parliament. The SC should have ignored it. The perception will now be that the SC declared the increase null and void but the government still imposed it.

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  • shariq
    Jun 21, 2013 - 1:23PM

    @Yousuf:
    do not fool this nation anymore

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  • Naresh
    Jun 21, 2013 - 1:28PM

    .
    I am sure that the IMF will be pleasantly amused at this latest dictat from Pakistan’s Supreme Court.
    .
    All Power to Chief Justice the Honourable Mr. Justice Iftikhar Muhammad Chaudhry, HCJP .
    .
    Cheers

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  • Parvez
    Jun 21, 2013 - 1:36PM

    Playing to the gallery, at the expense of the economy and the nation………..this must stop.

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  • Riz
    Jun 21, 2013 - 1:45PM

    @SC: Why did you declare this 1% increase as Null and void? They say only rich will be taxed in this budget.

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  • Paindoo
    Jun 21, 2013 - 1:46PM

    @PakArmySoldier:
    SC hasn’t declared the hike of GST null and void rather it has said that to collect the increased tax only after passing the Finance Bill from parliament and signing of President. What is wrong in it?

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  • Waseem Arain
    Jun 21, 2013 - 1:59PM

    ET your heading is misleading. SC has declared the imposition of GST raise before parliamentary approval as void. It has not STOPPED the parliament from approving the raise in GST.

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  • startrek
    Jun 21, 2013 - 2:24PM

    Now as next step sc should declare parliament nul and void and take control of Pakistan,This is what is called institution intereference in other domain.Extremist are killing innocent citizens sate is silent and sc is sleeping.

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  • Farouk Khan
    Jun 21, 2013 - 2:40PM

    In the parliamantary system, taxes are collected when the budget is proposed. if the budget is rejected, the government resigns. Now who will stop the hoarding. In pakistan the CJ has gone overboard and is reinventing the system.

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  • choptocut
    Jun 21, 2013 - 3:20PM

    Although I am against the GST hike, but this form of intervention in a democratic, non-centralized government is worst. Who has the mandate to decide on resournce allocation and taxes? Only elected government. Even government can change the law, Supreme court can only interpret and decide on legal issues.

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  • FactCheck
    Jun 21, 2013 - 3:25PM

    Is the supreme court of Pakistan responsible for the national budget, deficit, public services, military, etc. If it is responsible for the armed forces then, it needs to bring it under judiciary immediately.

    Most people in other democratic countries would be as confused I am about the supreme court ruling. If a duly elected sitting government cannot control its own budget without court interference, there is somethings absolutely wrong with Pakistan’s democracy and its constitution.

    Not talking about whether 1% increase is good or bad but the question is about separation of the three branches of government usually found many nations.

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  • mansoor
    Jun 21, 2013 - 3:35PM

    it is the law who authorizes court to make such decisions. if you want to stop it, kindly change the law.

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  • MM
    Jun 21, 2013 - 3:42PM

    CJ was restored by MIAN brothers now they have to face him.

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  • Concerned Tax Payer
    Jun 21, 2013 - 3:54PM

    Kudos to the Supreme Court. Broadening the tax base is required. Not burdening the fragile formal economy and existing tax payers with more taxes.

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  • Emjay
    Jun 21, 2013 - 5:04PM

    Misleading title. It’s only stopped until parliament passes it.

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  • AA Salim
    Jun 21, 2013 - 6:00PM

    The Sharief Govt tried to take that extra 1% collection till the billl is passed, into their personal coffers. This is how corrupt money is collected.

    The chief justice should be commended for taking Suo Moto notice of this illegal action. Govt. can not collect the extra GST until the parliament passes the bill and President signs it.

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  • Naseer Qureshi
    Jun 21, 2013 - 6:12PM

    Through parliament it will be passed again and 17% GST will be imposed again so no relief for common poeple…

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  • Hira Javaid
    Jun 21, 2013 - 6:47PM

    I like this decision of the supreme court. However, the government revenues will decrease unless they increase the tax net and impose taxes on all types of income, agriculture included. I think they should tax the rich rather than the poor so that more money can be collected without many hardships.

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  • SH
    Jun 21, 2013 - 7:30PM

    The Supreme Court has no business interfering with the Executive in this way. Taxation, financial decisions are functions purely of the executive. It’s curious to note also, that the order stated that excess collected taxes be deposited with the Supreme Court…self interest much??!!

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  • Nilesh
    Jun 21, 2013 - 8:08PM

    Why waste money on Elections, Parliament and government when all the decisions from policy to tax collections are taken by the Supreme court??!

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  • Aschraful Makhlooq
    Jun 22, 2013 - 10:11AM

    Why this has been happening in PPP’s regime and now happening in PML-N’s regime that Supreme Court interferes to coerce the government to withdraw the orders in most of the brutal and cruel steps taken the government regarding excessive taxes on the necessary items useable in daily life and sometimes laws against the nation and why the government can’t make and implement the that laws in which Supreme Court has not to interfere?
    Is this any governments’ old bad habit that unless Supreme Court will interfere the governments can’t recognize themselves?????

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  • Pervaiz
    Jun 22, 2013 - 1:36PM

    @Zubair:
    the same practice was being practiced by SC in PPP period of GOVT

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