A formal explanation from the FBR Policy Wing said that until January 15, 2022, solar panels and accessories could be imported and sold without paying sales tax. The above-mentioned provision was taken away, though, when the Finance (Supplementary) Act, 2022 was passed by the government using its power under Article 77 of the Constitution and as part of GST reforms carried out under the 6th review of the IMF’s Extended Fund Facility (EFF) programme.
A policy statement from the FBR talks about whether sales tax should be charged on importing solar panels.
There is a lot of misunderstanding about the FBR records for “further sales tax” and “extra sales tax.”
For this reason, solar panels and their parts started to be subject to the regular sales tax rate. Everyone was forced to follow the rule, with no one being treated differently.
Also, the Finance Act of 2022 removed sales tax exemptions for importing and selling photovoltaic cells, whether they were put together in modules or made into panels. This was done by adding S. No. 164 of Table 1 to the Sixth Schedule to the Sales Tax Act of 1990. All other accessories and related items for solar panels were still taxed at the standard rate.
So, solar cells are not subject to sales tax, whether they are made in the country or brought in from another country. Because of this, the petitioner’s claim that Article 25 of the Constitution was broken is false, since there is no unfair treatment of things in the same class.
The FBR also made it clear that the above-mentioned goods are no longer subject to sales tax. This was done as a convenience move and does not stop anyone from doing any legal business. Because of this, there is no question that articles 9 and 18 of the Constitution were broken, and the legislative action taken by the assembly is also not illegal.
The exemption from sales tax that used to be available for importing and selling solar panels and accessories was taken away. Only the legislature, which has the authority to tax the import, production, or consumption of goods under Article 77 read with Entry No. 49 of Part-1 of the Federal Legislative List of the Constitution of Pakistan, restored it later for photovoltaic cells. As a result, it is clear that no basic rights have been broken, FBR said.
