SC suspends Rs. 200m Excise TaxChamikara Weerasinghe
The Supreme Court yesterday issued an interim order suspending the gazette notification that imposes minimum Rs. 200 million Excise Tax on alcohol and beer manufacturers.
The new minimum Excise Tax of Rs. 200 million was imposed on spirit manufacturers through the government's interim budget. It was published in the February 13 Gazzette. The licenses of liquor manufacturers, who fail to pay this monthly Excise Tax, were to be cancelled, according to it. The court was taking up a petition filed by four alcohol and beer manufacturers.
The lawyers appearing for complainants pointed out that the tax concerned have been imposed on them disregarding the production quantity and the capacity of the manufacturer in terms of size of his business and that it is unfair to impose a tax of a kind on everyone.
The lawyers said their clients, the petitioners Nipon Expo, Acme Lanka, Scotland Distilleries, Sangari Sundaralingam and Uva Glen are unable to run their spirit enterprises because of the situation.
It was also pointed out that the minister has no power to impose excise taxes on beer or alcohol producers under section 28 (A) of the Excise Act. The respondents' lawyers, Deputy Solicitor General Viraj Dayaratna said that the tax was imposed based on a policy decision of the government and that under section 22 of the Excise Act, the Minister has been empowered to impose such taxes.
A panel of three Supreme Court Judges led by Chief Justice K. Sri Pavan, Justice Sisira de Abrew and Anil Gunaratna examined the petition. The judges of the Supreme Court said that at a glance it appears when considering the sections 28 (A) and 16(C)) of the Excise Act, that the minister does not have authority to impose taxes but he is empowered to cancel or suspend the licenses concerned.
The Supreme Court ordered the Finance Minister and other respondents to file objections.
The petition will be taken up on April 30.
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