FCC Grants Stay in KEPZ Sales Tax Matter

Mohsin Tayebaly & Co. is representing several industrial undertakings operating within the Karachi Export Processing Zone (KEPZ) in a matter pending before the Honourable Federal Constitutional Court of Pakistan.

The controversy stems from an administrative Circular issued by the Export Processing Zones Authority (EPZA) seeking to levy sales tax on electricity supplied to the industrial units within the KEPZ. EPZA sought to rely upon a prior judgment of the Honourable Supreme Court to enforce an upfront collection of sales tax subject to a subsequent refund mechanism. The industrial investors have historically enjoyed statutory zero-rating and tax protections under the Sales Tax Act, 1990, further fortified by the statutory framework of the EPZA Ordinance, 1980 and the EPZA Rules, 1981.

The matters were fixed before the Honourable Federal Constitutional Court on 13 August, and after hearing the Apex Court was pleased to grant leave to appeal and issue an ad-interim injunction restraining the Respondents, including EPZA, from taking any coercive measures against the petitioners (our clients) pending final adjudication.

This matter is being led by Mr. Arshad M. Tayebaly (Senior Partner), who is being assisted by Mr. Abdul Ahad Nadeem (Associate Partner) and Mr. Zalland Kasi (Associate). We are grateful for the continued trust our clients place in our Firm to protect their interests in complex constitutional and tax litigation.