| Case ID |
0ab2d3ba-cf6b-4a95-a6e0-879f54f57abd |
| Body |
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| Case Number |
NEW W. P.No. 9491 of 2006 |
| Decision Date |
Jan 22, 2016 |
| Hearing Date |
Jan 22, 2016 |
| Decision |
The Lahore High Court dismissed the petition challenging the levy of federal excise duty on the franchise services provided to Honda Atlas Car Pakistan Ltd by Honda Japan. The court found that the relationship under the License and Technical Assistance Agreement constituted a provision of franchise services as defined under the Federal Excise Act, 2005. The court reasoned that the technical assistance and know-how provided by Honda Japan were essential for the manufacture and sale of Honda automobiles in Pakistan, thus falling under the ambit of taxable services. The court concluded that the petitioner was liable to pay federal excise duty as the services originated outside Pakistan but were rendered in Pakistan. |
| Summary |
In the case between Honda Atlas Car Pakistan Ltd and the Federation of Pakistan, the Lahore High Court addressed the issue of whether federal excise duty could be levied on services provided by Honda Japan under a License and Technical Assistance Agreement. The court analyzed the definitions of 'franchise' and 'services' as per the Federal Excise Act, 2005, determining that the technical assistance and know-how provided by Honda Japan constituted taxable franchise services. Despite the petitioner's arguments against the imposition of excise duty, the court upheld the levy, stating that the nature of the agreement involved essential services for the manufacturing process. This ruling emphasizes the significance of understanding tax obligations in franchise agreements and the classification of services under the law, providing crucial insights for businesses engaged in similar licensing arrangements. |
| Court |
Lahore High Court
|
| Entities Involved |
Federation of Pakistan,
Honda Atlas Car Pakistan Ltd,
Honda Japan
|
| Judges |
AYESHA A MALIK
|
| Lawyers |
Mr. Waleed Khalid,
Mr. M. Shoaib Rashid,
Mr. Muhammad Zikria Sheikh,
Ahmad Cheema
|
| Petitioners |
Honda Atlas Car Pakistan Ltd
|
| Respondents |
Federation of Pakistan
|
| Citations |
2016 SLD 174
|
| Other Citations |
Dr. M.B Ankalsaria v Commissioner of Wealth Tax, Karachi (1992 SCMR 1755),
Diamond Food Industries Limited v Joseph Wolf GmbH & Co. (2004 CLD 343),
Amin Textile and others v. Federation of Pakistan and others (2002 CLC 1714)
|
| Laws Involved |
Federal Excise Act, 2005
|
| Sections |
2(12)(a),
2(23),
3(1)(d)
|