DHA Challenges FED on Transfer of Properties in Finance Act 2024

Islamabad High Court (IHC) has taken up the case of the Defence Housing Authority (DHA) Islamabad on the imposition of Federal Excise Duty (FED) on the transfer or allotment of immovable properties under the Finance Act 2024. The IHC has issued notices to the Federal Board of Revenue (FBR) and the Attorney General of Pakistan in this regard. Defence Housing Authority (DHA) Islamabad has challenged the vires of Table-III, First Schedule of the Federal Excise Act 2005. In the order of the Chief Justice of the IHC in writ petition number 2672 of 2024, the petitioner contended that through the referred amendment, the Excise Duty on transfer or allotment of properties by developers/bidders has been imposed. It was further contended that no corresponding change was made in the charging section of the Federal Excise Act, 2005, and without the same, this could not have been done. It was submitted that the Excise Duty is leviable on goods and/or services and the referred transfer does not fall within the said categories. The counsel pointed out that immovable property does not fall within the domain of the goods, hence Table-III is ultras vires the Act. “ Notice to the respondents. Since vires of Federal Statute have been challenged, notice under Order 27-A CPC shall also be issued to the Attorney General for Pakistan”, IHC order added.