KARACHI: M/s Continental Biscuits Limited has approached the Sindh High Court (SHC), challenging demand for federal excise duty on franchise services under the Federal Excise Act, 2005.
The petitioner’s counsel stated the deputy commissioner IR, Audit Unit -I ,Zone – IV, issued a show cause notice on January 11, 2016 demanding Rs 9.79 million as federal excise duty on franchise services under Federal Excise Act, 2005 for the period from January 2013 to December 2013.
According to the petitioner, the federal excise duty was being collected by the federal government on all taxable services, including the franchise services but the since the 18th Amendment and of the establishment of the provincial revenue collection authorities for collection of sales tax on services, the federal government has no jurisdiction to collect federal excise duty on services.
“However, respondents are demanding federal excise duty on services, despite the sales tax on the services had already been paid to the province,” M/ s Continental Biscuits Ltd added.
Citing secretary revenue division, chairman FBR, chief commissioner IR, Large Taxpayer Unit, Commissioner IR, Zone – IV, Large Taxpayer Unit, deputy commissioner IR, Audit Unit -I, Zone – IV, Large Taxpayer Unit as respondents, the petitioner prayed to the SHC to declare that impugned show cause notice, as illegal and without lawful authority.
The court was requested to restrain the respondents from recovering federal excise duty on franchise services.