Federal Court allows tax credit adjustment against super tax

August 17, 2026 (MLN): The Federal Constitutional Court has allowed corporate taxpayers to adjust tax credits against super tax, overturning an Islamabad High Court ruling that had rejected the relief sought by Zong.

A six-page detailed judgment authored by Justice Aamir Farooq allowed appeals filed by the private mobile phone company, holding that tax credit arising from filing and deduction can be adjusted against super tax.

The court observed that tax credit available under Section 168 of the Income Tax Ordinance represents a separate and established legal right of taxpayers, according to APP.

It ruled that restricting taxpayers from adjusting the available credit and requiring them to claim only a refund would run contrary to the intent of the legislation. The judgment further noted that fiscal laws should be interpreted in a manner that supports taxpayer benefit and facilitation.

The court directed the Federal Board of Revenue (FBR) to examine and decide Zong’s claim for adjustment in accordance with the law. The claim was submitted in response to a notice issued by the court.

According to the case record, the FBR had issued Zong a notice seeking payment of super tax. The company subsequently approached the Islamabad High Court, requesting adjustment of its available tax credit against the super tax liability.

The Islamabad High Court dismissed the petition, following which Zong challenged the decision before the Federal Constitutional Court.

The Federal Constitutional Court set aside the High Court’s judgment and allowed Zong’s appeals.

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