Peshawar High Court upholds Khyber Pakhtunkhwa sales tax on construction services
Pakistan
Pakistan’s constitutional court upholds Khyber Pakhtunkhwa construction services tax, ruling it constitutional, preventing double taxation
PESHAWAR (Dunya News) — The Federal Constitutional Court dismissed appeals against the Khyber Pakhtunkhwa Sales Tax on Services Act, 2022, ruling construction services tax legal.
Justice Aamir Farooq issued the written verdict, confirming that under the 27th Constitutional Amendment, the Supreme Court cannot invalidate laws on constitutional grounds.
The court clarified that Schedule 2, Serial 14 of the Act, covering construction services, does not violate the Constitution, as it applies to services, not goods.
The verdict emphasized that post-18th Amendment, provinces may levy taxes on services while the federal government may tax goods.
Citizens or companies will not face double taxation, with mechanisms in place for proper allocation. The Revenue Authority was directed to establish rules separating contractors’ budgets into services and goods components.
