Yamaha Motor obtains interim relief from SHC on retrospective export conditions

By Nasir Mahmood 

KARACHI: The Sindh High Court has issued an order to notify the Deputy Attorney General and the Federal Board of Revenue (FBR) in a case filed by Yamaha Motor Pakistan (Pvt.) Ltd. The petition challenged the retrospective application of SRO 269(1)/2022, issued by the Ministry of Finance and Revenue. This SRO amends the long-standing SRO 656(1)/2006 by introducing conditions tied to the Auto Industry Development and Export Policy (AIDEP) 2021-26, which Yamaha claims imposes an unreasonable burden.

The court has directed the FBR and other respondents to submit a detailed response and decided to consolidate this petition with Constitutional Petition No. D-5047/2023 for collective adjudication. This ensures that the broader implications of the retrospective amendments will be addressed comprehensively.

Yamaha contended that similar cases, where interim relief has been granted, are already pending before the court, including an earlier order dated 18.10.2023, which temporarily protected other petitioners from the enforcement of the disputed conditions. In response, the court has extended similar interim relief to Yamaha Motor Pakistan, barring the government from taking adverse action under the amended SRO until the matter is resolved.

The core issue revolves around the government’s requirement, as outlined in the amendment, that businesses must comply with export promotion targets to continue availing tax concessions under SRO 656(1)/2006. These conditions, stemming from the AIDEP policy approved in 2021, mandate manufacturers to meet specific export milestones in order to retain import duty benefits on components used in local manufacturing. The petitioner argued that applying such requirements retroactively not only disrupts operational stability but also unfairly penalizes companies like Yamaha, which have relied on previous terms for their business planning.

The Court Order issued on 2nd December 2024 granted exemption subject to other exceptions. The petitioner challenged various notifications including notification dated 01-12-2024 concerning SRO-269(1)2022 issued by the Ministry of Finance & Revenue (Revenue Division) Government of Pakistan whereby the SRO-656 dated 26-06-2006 with retrospective effect to the disadvantages to the petitioner. The counsel for the petitioner sought interim relief in respect of the said notification.

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