Overview
- Led by Justice Aamer Farooq, a two-judge bench dismissed challenges to Serial No. 14 and held the levy constitutional after examining Entry 49.
- The court affirmed that provinces may tax services after the 18th Amendment, while the federal authority extends to goods.
- The bench clarified its authority under Article 175E(5) to decide substantial questions of constitutional interpretation.
- The 2% charge covers services by contractors, architects, engineers, developers, interior designers and allied professions across major construction works.
- To prevent double taxation, the revenue authority was told to require budgets that separate goods from services, with the court noting taxpayers can adjust or claim refunds on goods taxes; earlier KRA notices sought tax on July 2021–April 2022 receipts including goods.