Counsel for Sindh govt tells FCC: SIDC was levied to develop road infrastructure

ISLAMABAD: Sindh government counsel told the Federal Constitutional Court (FCC) that the development cess was imposed to develop and maintain infrastructure for smooth and safe movement of goods on the roads within the province.

A two-member bench, headed by Chief Justice Amin-ud-Din Khan, on Wednesday, heard the petitions challenging the Sindh Infrastructure Development Cess (SIDC).

Farooq H Naek, representing the Sindh government, asked the bench to examine the Sindh Development and Maintenance of Infrastructure Cess Act 2017, keeping in view the constitutional background of the entries, and the objects and purposes of the Act, and declare it as a valid piece of legislation enacted by the competent legislature.

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He argued that it has also been settled by the apex court that since cess is a fee, a cess-imposing enactment cannot be introduced through the Money Bill or Finance Act, and the impugned Act was not introduced through a Money Bill by the Sindh Assembly, so it could not be invalidated on this ground.

Justice Amin questioned if goods arrive in the province by air and are transported from the airport to other provinces, then cess would apply on those items as well. Similarly, the petroleum products which come by sea and are transported via pipelines use no road of the province.

Justice Amir Farooq inquired whether the cess would also be levied on material that is carried by rail, adding that the railway is the federal government’s property.

He stated that the preamble and charging section 3 of the Act, 2017 show that it is made to consolidate law relating to the levy of cess on goods carriage by road entering into and leaving the province from or for outside the country through air or sea, for development and maintenance of infrastructure of the province.

The Sindh counsel submitted that the perusal of the preamble, charging section 3 and section 12 of the Act, 2017, makes it clear that the incidence of cess is on goods carriage by road and smooth and safer movement in the province. It has also been ensured in Section 13 of the Act that proceeds of the Cess shall be utilised for maintenance and development of Infrastructure and other ancillary activities in the province, he added.

He argued that the petitioner’s case is not covered under Entries 24, 27, 43 and 54 of the Fourth Schedule, Part-I of the Constitution; as Entry 24 relates to the carriage of passengers and goods by sea or by air and it does not cover carriage of goods by road, while Entry 27 is about import and export across customs frontier as defined by federal government, inter-provincial trade and commerce, trade and commerce from foreign countries; standard of quality of goods to be exported out of Pakistan.

He emphasised that from a plain reading of the impugned Act, it transpires that it does not relate to import and export of goods across the border, no trade and commerce is allowed with foreign countries, and no tax on the activity of import and export is levied under the Act, 2017.

Naek submitted that Entry-43 relates to the imposition or levy of duties of customs, including export duties. He argued that the perusal of the law under challenge shows that no duty for import and export of goods is introduced under this law, but only a cess, which basically is not a tax for carriage of goods by road and smooth and safe movement in the province is introduced. He maintained that Entry 54 is about fees in respect of matters related to the federal legislature or federal government.

Naek further argued that the law under challenge is not covered under the Fourth Schedule. Hence, it cannot be said that the cess levied by the province is a subject of the federal legislature.

The hearing of the case was adjourned until today (Thursday).

Copyright Business Recorder, 2026