Islamabad (HRNW)- The Federal Constitutional Court has issued a major 293-page judgment on the super tax case, declaring the decisions of the Islamabad High Court null and void and upholding the implementation of super tax under Section 4C of the Income Tax Ordinance 2001. The detailed judgment was announced by Chief Justice Aminuddin Khan of the Federal Constitutional Court, in which the super tax has been declared constitutional.
The court ruled that the super tax will be treated as a separate levy independent of income tax and confirmed that it will apply for the tax year 2022 and onward. It further stated that Parliament has full constitutional authority to impose taxes on income, and that the Islamabad High Court’s direction to issue a circular to the Federal Board of Revenue (FBR) was beyond its jurisdiction. The judgment clarified that super tax is an additional tax and not a substitute for income tax.
According to the ruling, Section 4C applies to income falling under a separate tax regime and also extends to capital gains. It further stated that super tax will apply to petroleum and exploration companies within defined legal limits and contractual agreements. Welfare and pension funds will be required to obtain exemption certificates, while retrospective taxation through legislation has been declared legally permissible.
The court also observed that imposing higher super tax rates on specific sectors does not amount to discrimination but falls within the legislative powers of Parliament. It clarified that exempt income will remain exempt from super tax, and no tax will be imposed where income itself is not taxable under law. Exemptions were also noted for property and share sales under tax-free conditions, inheritance cases, delayed income, and agricultural land transactions.
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