Peshawar High Court declares levy of excise duty on hand-stemmed tobacco illegal

The Peshawar High Court has ruled that federal excise duty does not apply to green-leaf or hand-stemmed tobacco unless a green leaf threshing unit processes and converts it. Dawn reported that the court disposed of 14 petitions brought by tobacco growers, companies and GLT units over tax demands, sealed premises and seized goods.

The judges ordered authorities to release seized tobacco, vehicles, equipment and records, and to unseal premises and machinery. In cases where officials claim the stock was processed by a GLT unit, they can retain identified goods for up to 15 days while hearing the affected party and issuing a reasoned decision. The ruling also cancelled a Rs123.992 million FED demand against Royal Tobacco Company and ordered the release of its tobacco stocks; a separate petitioner, Pak Hills Tobacco Company, was granted release of 3,375 kg of tobacco and its vehicle. Other sales tax or confiscation matters remain subject to proceedings under the law.