Luxury Tax on Residential Properties Stays

[Salman]

The Lahore High Court stayed the recovery of luxury tax on houses of two kanals and above.

The court sought replies from Punjab government and other respondents on petitions challenging imposition of the luxury tax on big residential properties. Petitioners stated that the government had imposed luxury tax by amending Section 8 of the Finance Act and later withdrew it and now again levied the same tax.

They said the government levied a luxury tax in budget 2013 on the houses located in a rating area specified as “Category A” under the Punjab Urban Immovable Property Tax Act, 1958. After imposing the tax the department was sending notices to the house owners.

They pleaded that the luxury tax was unjust, discriminatory and equal to double taxing. They asked the court to declare the impugned tax illegal and set aside the notices issued to them by the excise and taxation department.

A division bench heard the arguments and stayed the recovery of the tax till the disposal of the petitions.