Law: Federal Excise Act, 2005

Section: 2(23),3,3(1),16(1),33

Law: Banking Companies Ordinance, 1962

Section: 5

FEDERAL EXCISE ACT, 2005---Sections: 2(23), 3, 3(1) 16(1) - PCT Heading 98 13 - Definitions -Duties specified in the First Schedule to be levied - Exemptions -Services provided by Banking Companies or non-banking financial companies - Scheduled Bank - Engaged in banking business as defined in Section 5 of the Banking Companies Ordinance, 1962 - Less payment of FED on income declared in the accounts as ;‘Fee, Commission brokerage income from dealing in foreign currencies and other income” - DC1R finalized assessment charging FED @ 16% - CIR(A), in appeal, observed that all activities, except income from foreign currency re-valuation and re-imbursement of godown expenses, fell under the ambit of “Services” and thus confirmed levy on receipts - Appeals to Appellate Tribunal - FACTS Brief facts of the case are the taxpayer, a scheduled bank, is engaged in banking business as defined in section 5 of the Banking Companies Ordinance of 1962. Appellant-bank paid lesser amount of Federal Excise Duty [FED] on income declared in the accounts as “fee, commission brokerage, income from dealing in foreign currencies and other income”. DCIR finalized the assessment by charging FED@ 16%. There orders were assailed before CIR (A). The primary argument of the appellant/bank before CIR (A) was that these activities did not fall within the ambit of chargeability under the Federal Excise Act, 2005. According to CIR(A), all activities, except income from foreign currency revaluation (a component of ‘dealing in foreign currency’) and reimbursement of godown expenses, fell under the ambit of ‘services’ and since appellant-bank receipts. ARGUMENTS Learned AR of appellant-bank argued that CIR(A) erred in applying rule of interpretation of other tax lawson interpretation of Federal Excise Act, 2005. According to him, Income Tax Ordinance, 2001, Sales Tax Act, 1990 and Customs Act, 1969 have their respective charging sections. All these statutes also have provisions/schedules which exempt a taxpayer from the payment of whole or part of the leviable tax. DECISION Federal Excise Act. 2005 - Sections: 2(23), 3, 3(1) 16(1) - Banking company - Less payment of FED on income declared in “fee,…

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