ISLAMABAD  - The Supreme Court of Pakistan has suspended the decision of Sindh High Court that declared tax rates prescribed for salaried individuals in the First Schedule to the Income Tax Ordinance, 2001 through Finance Act, 2012 illegal, ultra vires of the Constitution and Income Tax Ordinance 2001.

“The salaried individuals are informed that on 25.11.2013 the honourable Supreme Court of Pakistan has suspended the judgment of the honourable Sindh High Court that was announced in C.P NO.D-2342/2013 dated 25.10.2013. The FBR has filed a CPLA before the honourable Supreme Court against the judgment of the Sindh High Court,” said an official statement issued by FBR on Tuesday.

According to the statement, the effect of the suspension of the Sindh High Court judgment referred above is that now the rates of tax as already provided in clause (1A) of Division I of Part I of the First Schedule to the Income Tax Ordinance 2001 shall apply to all salaried individuals. “Those persons who have paid less tax in view of the judgment of the Sindh High Court (above) and have filed the returns, may calculate the short paid tax and deposit the same up to 30.11.2013 to avoid default surcharge etc”, the statement concluded.

Earlier, while deciding the a constitutional petition, the Sindh Court on October 25 has declared tax rates prescribed for salaried individuals in the Finance Act 2012 as illegal. It has been further declared that the arbitrary increase in the slabs at serial number 4, 5 and 6 is against the graduated rates of taxation and principle of natural justice. Hence, all salaried individuals shall be paying the tax according to the principles of graduated slab rates of taxation with no arbitrary increase.

SHC has also directed the tax department to issue tax refund to all the salaried individuals whose tax has been withheld and deposited in the treasury pursuant to incorrect amount of tax under Finance Act 2012, within a period of one month from the date of filing such return.

However, the Supreme Court of Pakistan has suspended the decision of Sindh High Court.

Meanwhile, In order to facilitate the trade and industry in getting their cargo cleared for imports/exports and payment of duty and taxes, it has been decided here today that all the Model Customs Collectorates shall remain open and observe normal working hours on Saturdays till further orders.

The Federal Board of Revenue has directed all the Chief Collectors to coordinate with management of State Bank and National Bank of Pakistan to provide banking facility by its designated branches on Saturdays to ensure collection of taxes and duties in this regard. The port authorities/ port operators are also requested to synchronise their working accordingly.