ISLAMABAD: The Supreme Court on Tuesday asked three oil exploration companies from Sindh to deposit a total of Rs100 million a contribution towards the Workers Welfare Fund (WWF) for the period 2015 in the office of the court`s registrar until it decides finally whether the federal or the provincial government should collect the funds after the subject of labour welfare has been devolved to provinces under the 18th Amendment to the Constitution.

The Federal Board of Revenue (FBR) was demanding from three companies engaged in petroleum exploration to submit with it two per cent of its total income.

A two-judge Supreme Court bench headed by Chief Justice Anwar Zaheer Jamali admitted for regular hearing identical petitions by different companies but fixed the same to be heard inthe last week of September.

The petitions were filed by PKP Exploration 2 Limited, PKP Kandanwari Limited and Kulpect Pakistan BV, all engaged in petroleum exploration in Sindh.

Barrister Raheel Kamran Sheikh who represented the three exploration companies argued before the court that the companies were ready to deposit the amount with the Sindh Revenue Board (SRB) in accordance with the Sindh WWF Act, 2015, so that it could be spent timely on the welfare of workers.

The dispute about the fate of WWF commenced when the companies received a notice on Jan 14 from the SRB demanding that since the Sindh Workers Welfare Fund (SWWF) Act, 2014, had come into force with effect from June 4, 2015, therefore, the companies should pay WWF contribution into Sindh government`s exchequer.

But the situation has become confusing since under the 2013 judgement of the Sindh High Court in the Shahbaz Garments case the payment was declared to be a tax and not a fee therefore liable to be deposited with the federation or the FBR.

The difficulty for the company surrounding these facts and circumstances was that it stands exposed to payment twice towards the WWF established by the federation as well as by Sindh, the counsel argued.

The counsel is pleading before thecourt that in the interests of justice the payment of the contribution toward the fund under Section 5(1) of the SWWF Act or under Section 4(1) of the WWF Ordinance, 1971 be declared `fee` to be spent essentially on the welfare of workers in enforcement of their fundamental rights embodied, inter alia, in Articles 9, 18 and 25A of the Constitution.

Being essentially a fee, the companies are liable to malce contribution towards the fund created by Sindh for the tax year 2015, the counsel said.

He argued that the legislative subject of welfare of labour had been devolved to the provinces with enactment of the 18th Amendment in 2010 and pursuant to such devolution, SWWF Act, 2014 has been enacted that manifestly repeals the Workers` Welfare Ordinance, 1971.

Since the fund cannot be applied for the general requirements of the state, it does not form part of the general revenue i.e. the national or a provincial exchequer, thereby lacks an essential attribute of a tax, the counsel argued.

The petitioners had also requested the Supreme Court to order FBR to ensure that it did not hinder or obstruct in any manner enforcement of the provisions of SWWF Act, 2014 and also direct SRB as well as FBR to refrain from charging, assessing and collecting additional amounts as provided in Section 4(8) of the Workers Welfare Fund Ordinance, 1971 and/or Section 5(8) of Sindh Workers Welfare Fund Act, 2014.