The Pakistan Poultry Association (PPA) has warmly welcomed a landmark judgment from the Federal Constitutional Court of Pakistan, describing it as a historic victory and a vital safeguard for the country's poultry industry. The PPA leadership, including Chairman Abdul Basit, Senior Vice Chairman Ghulam Khalique, and Vice Chairman Malik Muhammad Sharif, termed the ruling a significant step toward ensuring the sustainability and continued growth of Pakistan's poultry sector, which plays a critical role in national food security and affordable protein supply.
Court Ruling Details
The judgment, delivered by a bench comprising Justice Aamer Farooq and Justice Muhammad Karim Khan Agha, set aside an earlier decision of the Lahore High Court. It conclusively held that poultry feed manufacturers cannot be subjected to the additional 4% Further Tax under Section 3(1A) of the Sales Tax Act, 1990, when supplying feed to poultry farmers who are exempt from sales tax registration under the law.
Recognition of Advocacy Efforts
The PPA leadership paid special tribute to Dr. F M Sabir for his unwavering commitment, tireless advocacy, and continuous efforts in defending the interests of the poultry sector. They acknowledged that his dedicated legal and policy support proved instrumental in securing this landmark relief for the industry at a time when poultry farmers and allied businesses were facing immense economic challenges.
Remaining Fiscal Concerns
While celebrating the court's historic decision, the association emphasized that several fiscal distortions continue to burden the poultry sector and hinder its growth. The PPA has urged the federal government to immediately address two critical taxation issues that are adversely affecting producers, consumers, and export competitiveness.
The association strongly demanded the abolition of the Federal Excise Duty (FED) imposed on day-old chicks. According to the PPA, this tax unjustifiably increases production costs at the very beginning of the poultry value chain, placing additional financial pressure on farmers and ultimately raising the cost of poultry products for consumers.
The PPA has also called for the immediate withdrawal of the 18% sales tax on processed chicken. The association noted that such excessive taxation discourages investment in value-added poultry processing, impedes modernization of the supply chain, and creates a significant barrier to the export of processed poultry products. As a result, Pakistan loses valuable opportunities to earn foreign exchange and strengthen its position in international markets.
Court's Observations
The Constitutional Court's judgment addressed a longstanding anomaly between agricultural exemptions and tax registration requirements. In its ruling, the Court observed: The law does not require the exempted person from registration of the sales tax. Therefore, the petitioners, who are poultry farmers, are not required to be registered, but to make poultry feed manufacturers liable to payment of further tax (which eventually would be passed on poultry farmers), would not only be unjust but also against the system of payment of sales tax under the Act.
By harmonizing the relevant provisions of the Sales Tax Act, the Court clarified that no penal consequences or additional tax liabilities can be imposed on feed manufacturers merely because their customers are exempt poultry farmers.
Impact on the Industry
The PPA stated that this decision will protect thousands of small and medium-scale poultry farms across the country and provide much-needed stability to the sector. The association reiterated that the poultry industry remains one of Pakistan's most important sources of affordable animal protein, employment generation, and agricultural growth.
It urged policymakers to build upon the spirit of the Court's decision by eliminating unjustified taxes and creating a business-friendly environment that promotes investment, productivity, and food security.
Looking Ahead
The Pakistan Poultry Association expressed hope that the federal government will take immediate steps to rationalize the taxation regime for the poultry sector, thereby ensuring affordable protein for consumers, sustainable growth for producers, and enhanced export potential for the national economy.
