Peshawar High Court rules FED cannot be imposed on unprocessed tobacco

Profit by Pakistan Today reported that the Peshawar High Court has limited Federal Excise Duty (FED) on tobacco to material processed in a Green Leaf Threshing (GLT) unit. The judges said hand-stemming, whether done by workers or machinery, does not by itself amount to manufacturing under the Federal Excise Act.

In a petition by Pak Hills Tobacco Company, the court cancelled the FED claim and ordered officials to return 3,375 kilograms of seized tobacco and the company’s vehicle. It also overturned notices founded only on hand-stemming and directed the release of related property and the unsealing of premises and machinery. Authorities can hold specifically identified stock for up to 15 days if they suspect GLT processing, but must give the affected party a hearing and provide reasons. The judgment leaves sales tax, penalties and confiscation to be decided separately under applicable laws.