Pakistan’s Peshawar High Court declared the Khyber Pakhtunkhwa government’s provincial excise duty on unmanufactured tobacco unconstitutional. The bench ruled in favor of multiple petitions filed by leading tobacco companies, including Pakistan Tobacco Company, stating that the relevant provisions of the KP Finance Act, 2024 conflicted with the Constitution.
The petitioners challenged the Rs50 ($0.18) per kilogram levy on unmanufactured tobacco, arguing that excise duties fall exclusively under federal jurisdiction under the Federal Legislative List, and that the provincial assembly had no authority to impose a parallel duty. Lawyers for the petitioners emphasized that federal excise duty (FED) on tobacco is already administered by the Federal Board of Revenue under the Federal Excise Act, 2005, and the KP law encroached on parliamentary powers.
The court sided with the petitioners, agreeing that following the Eighteenth Amendment, the omission of the concurrent legislative list gave parliament exclusive power over matters such as excise duties, making the provincial tobacco levy ultra vires.
