Pakistan: The Federal Constitutional Court has raised concerns over Punjab’s 6% royalty imposed on the ex-factory price of cement, questioning whether the levy is being applied within legal bounds. The court observed that the structure appears to shift the royalty away from raw minerals and onto the finished product. During proceedings, judges highlighted that royalty, in principle, should be charged on extracted minerals such as limestone and clay, rather than on processed cement bags. The court said that the current mechanism could effectively function as a tax on production rather than a resource-based royalty. The court further observed that any upward adjustment in royalty is likely to be passed through the supply chain, ultimately hitting consumers through higher cement prices, rather than being absorbed by producers.
Pakistan’s cement bag royalty criticised
