Tax News Update    Email this document    Print this document  

May 7, 2024

Pakistan implements amendments to tax appeals system

  • Recent law changes in Pakistan have made significant changes to the tax appeals procedures in cases involving federal income tax, sales tax and federal excise tax.
  • These changes aim to streamline the tax appeals process, encourage the use of Alternate Dispute Resolution and establish clearer rules and timelines for resolving tax disputes.
  • The changes become effective on 16 June 2024.

Pakistan has implemented significant modifications to the tax appeals procedures in federal income tax, sales tax, and federal excise laws (tax laws) with the passage of the Tax Laws (Amendment) Act, 2024 (the Amendment Act) on 3 May 2024. These changes aim to streamline the tax appeals process, encourage the use of Alternate Dispute Resolution (ADR) forum and establish clearer rules and timelines for resolving tax disputes.

Key changes include:

  • New monetary thresholds for appeals have been set at PKR1 20m for income tax, PKR 10m for sales tax, and PKR 5m for federal excise law. Appeals within these limits go to the Commissioner (Appeals), while appeals exceeding them go directly to the Appellate Tribunal.
  • For cases adjudicated by the Commissioner (Appeals), the subsequent appellate forum will now be the High Court2 instead of the Appellate Tribunal.
  • The Appellate Tribunal must decide appeals within 90 days, and the High Courts within six months. The Appellate Tribunal can request an extension of up to 90 additional days from the Ministry of Law and Justice.
  • Appeal fees have been increased and timelines for filing appeals and reference applications have been shortened.
  • The modifications encourage use of ADR by lowering the threshold for tax liability disputes to PKR 50m and shortening the timeframe for appellate forums to decide pending appeals to 90 days after an ADR committee is dissolved.
  • After an Appellate Tribunal decision, tax due is immune from recovery for 30 days. If a reference application is filed with the High Court, a stay may be granted subject to payment of 30% of the tax determined; the stay expires after six months.
  • The Commissioner may delay a refund arising from a High Court's decision if intending to appeal to the Supreme Court.

A more detailed summary of some notable changes follows.

Pecuniary limits

Prior to the amendments, the tax laws allowed for a first appeal against any adverse order issued by a Revenue Officer to be filed with the Commissioner Inland Revenue (Appeals), and a second appeal with the Appellate Tribunal, with no monetary limits at either stage. The new legislation introduces financial thresholds of PKR 20m for income tax, PKR 10m for sales tax, and PKR 5m for appeals involving federal excise law. The thresholds refer to the value of the tax assessment or tax refund involved in an order issued by a revenue officer. Now, an appeal of an order to the Commissioner (Appeals) shall lie if the value of the tax assessment or tax refund involved falls within the specified limits; otherwise, the appeal must be filed directly with the Appellate Tribunal.

Effective date of amendments

The Amendment Act is set to take effect on 16 June 2024. As of this date, the newly established thresholds will apply, and appeals must be filed in accordance with these limits before the appropriate forums. Furthermore, it is specified that any appeals currently pending before the Commissioner (Appeals) as of 16 June 2024 that exceed the specified monetary thresholds will be transferred to the Appellate Tribunal.

Elimination of one appellate forum

With the Amendment Act's introduction of monetary limits for cases adjudicated by the Commissioner (Appeals), the subsequent appellate forum will now be the High Court, rather than the Appellate Tribunal. Decisions on appeals filed directly with the Appellate Tribunal can be challenged through filing a reference application before the High Court.

Timeframe to decide appeals

The Amendment Act introduces specific timeframes for the resolution of appeals by both the Appellate Tribunal and the High Courts. An appeal submitted to the Appellate Tribunal must be decided within 90 days of its filing. Appeals transferred from the Commissioner (Appeals) should be decided within 180 days. If an appeal is not concluded within the designated timeframe, the Appellate Tribunal must request an extension from the Ministry of Law and Justice, which can grant an additional period of up to 90 days.

The High Courts are now mandated to decide a challenge to a decision of the Commissioner Appeals or the Appellate Tribunal within six months of its filing.

It is important to note that the amended laws do not specify any consequences for failing to decide the appeals or reference applications within these timeframes. Therefore, the provided timeframes appear to be advisory, rather than mandatory.

Appointment of the Appellate Tribunal

The new provisions stipulate that rules will be established to regulate the procedures and operations of the Appellate Tribunal, including the appointment of members, the formation of benches, case management system, distribution of cases, and other related matters. Currently there are two sets of rules in place: (i) the Appellate Tribunal Inland Revenue (Appointment of Chairperson and Members) Rules, 2020; and (ii) the Appellate Tribunal Inland Revenue (Functions) Rules, 2023. Forthcoming rules are expected to supersede the existing sets of rules.

Fees and timelines for filing appeal/reference application

The revised fee structure and timelines for filing appeals and reference applications is as follows:

Forum of appeal




Timeline to file appeal/ reference









Appellate Tribunal:









  • Cases involving companies








  • Other cases









High Court:

  • All cases








Revised procedure for deciding appeals by the Appellate Tribunal

Under the revised system, when an appeal is brought before the Appellate Tribunal, the Appellate Tribunal will, at the initial hearing, inform the taxpayer of the option to utilize the ADR mechanism. If the taxpayer opts not to pursue ADR, the Appellate Tribunal will then, in consultation with both the taxpayer and the Commissioner, establish a hearing schedule that both parties are expected to strictly followed. During the appeal hearings, adjournments will not be granted to either side except in exceptional circumstances. Moreover, a minimum fee of PKR 50,000 will be levied for any request for an adjournment.

Alternative Dispute Resolution

The framework outlined in the preceding paragraph appears to be crafted to encourage taxpayers to take advantage of the ADR mechanism, which was first introduced in 2004. Since its inception, the provisions governing ADR have been amended several times; the most recent changes were made through the Finance Act, 2023, which corrected amendments from the Finance Act, 2022 to make them effective. Despite these changes, the ADR mechanism has not been widely employed, largely due to a lack of trust stemming from the absence of meaningful outcomes.

The Amendment Act has introduced certain amendments to the ADR provisions, in particular:

  • Previously, only cases involving disputes of PKR 100m or more in tax liability, or disputes regarding the admissibility of refunds, were eligible for ADR. This threshold has now been lowered to PKR 50m.
  • If the Committee established by the Pakistan Federal Board of Revenue (FBR) for ADR is dissolved due to its failure to resolve the dispute within the allotted time, the appellate forum where the appeal was pending must now decide the pending appeal within 90 days from the date the order dissolving the Committee is communicated to them; the previous timeframe had been six months.
  • Along with the application for ADR, the taxpayer must now attest that the decision of the Committee will be binding on him in all respects and that, immediately after the Committee issues its decision, he will withdraw all pending litigation or cases involving the dispute at issue.

Stay of tax demand

The Amendment Act grants the Appellate Tribunal the authority to stay the recovery of tax demand for 90 days upon the taxpayer's application, as compared to 180 days previously. The effectiveness of the stay is contingent upon the taxpayer's adhering to the hearing schedule set by the Appellate Tribunal. If the appeal is not decided within the statutory 90-day period, the stay will remain in effect until the Appellate Tribunal finalizes the appeal.

Once the Commissioner Appeals or the Appellate Tribunal decides an appeal, the resulting tax due is protected from recovery for 30 days from the date the order is communicated to the taxpayer. If the taxpayer files a reference application with the High Court challenging the order by the Commissioner Appeals or the Appellate Tribunal, as the case may be, and also applies for a stay, the High Court may grant a stay subject to the payment of 30% of the tax determined by the Appellate Tribunal. This stay order will expire six months from the date it is issued.

The Amendment Act introduces a new concept of refund forfeiture. If the High Court's decision results in a refund for the taxpayer, the Commissioner may apply to the High Court within 30 days of receiving the judgment, indicating an intention to appeal to the Supreme Court of Pakistan. The High Court may then authorize the Commissioner to delay the refund until the Supreme Court decides the matter.

Note that this Tax Alert is general in nature and is not a substitute for detailed research or the exercise of professional judgment. Accordingly, no decision on any issue should be taken without seeking specific professional advice and further consideration.

* * * * * * * * * *


1 PKR is the abbreviation for the Pakistan Rupee.

2 Note that a taxpayer would appeal to the High Court relevant to his jurisdiction.

* * * * * * * * * *
Contact Information

For additional information concerning this Alert, please contact:

EY Ford Rhodes, Karachi

EY Ford Rhodes, Lahore & Islamabad

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor