No tax deduction on mobile top-up till SC says so


ISLAMABAD: The Supreme Court (SC) on Thursday ruled that its order barring the deduction of taxes on the top-up of prepaid mobile cards will continue to hold until the court delivers a second order in the case.

On June 11, the apex court had suspended all the taxes deducted by the cellular companies on mobile phone recharge and gave a two-day deadline to the companies for implementing the order.

Days later, following the court’s order, cellular companies decided to suspend all taxes on mobile phone recharge through pre-paid scratch cards.

The Federal Board of Revenue (FBR) had said that it will establish a new mechanism regarding tax deduction on mobile phone recharge within 15 days, in collaboration with local cellular firms.

During a separate hearing of the case on Thursday, Chief Justice of Pakistan (CJP) Mian Saqib Nisar remarked that it was said that the decision to suspend deduction on mobile balance was for a limited time period and that the practice would resume following the expiry of two weeks.

Justice Nisar said this in the presence of the attorney general and several other members of the federation.

“The taxes on mobile balance cannot be deducted until the court’s next orders,” Justice Nisarn said. “The decision to suspend tax collection on mobile cards will hold until then.”

Earlier, the consumers were paying 42 per cent tax, including 19.5 per cent FED, 12.5 per cent WHT and 10 per cent service/ maintenance charges on every Rs100 card.

The CJP took the notice on May 3 and had issued notices to the federal government and cellular companies, asking “under which head an amount of Rs40 is being charged on every Rs100 recharge”.

Earlier, Senator Muhammad Ateeq Shiekh during the meeting said, consumers, have to pay Rs28 on Rs100 card which is unfair. The government should remove advance and withholding tax being charged on Rs100 mobile card, he demanded.