Pakistan Telecom explains tax rates on phone usage

Pakistan Telecom explains tax rates on phone usage

ISLAMABAD: Pakistan Telecommunication Authority (PTA) on Wednesday explained prevailing tax rates on usage of mobile phones.

The authorities stated that Cellular Mobile Operators (CMOs) are deducting withholding tax (on recharge) and General Sales Tax/Federal Excise Duty (on package subscription) after restoration of taxes by Supreme Court of Pakistan from April 2019.

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On recharge/reload of Rs.100, a balance of Rs.86.96 is being credited to the subscribers after deduction of withholding tax at 15 per cent instead of Rs.76 (as reported in the social media).

Similarly, on recharge of Rs.200, balance credited to the consumer account is Rs.173.91 instead of Rs.152 after deduction of Rs 26.09 as withholding tax at 15 per cent.

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As far as general sales tax is concerned, it is applied at 19.5 per cent on the basis of usage. It is further clarified that a total of Rs.28.38 (GST) has been charged when a user consumes all of his / her balance of Rs. 173.91 against recharge of Rs.200.

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In the same way, if a package is priced at Rs.167 (excluding general sales tax and withholding tax), total price of such package (including the taxes) comes to Rs.230 (price Rs.167+GST Rs.32.56+WHT Rs.30.43).

PTA has fixed a ceiling on call setup charges at Rs.0.15 per call. Moreover, PTA is vigilant about the rates / tariffs being charged by CMOs & action shall be initiated in accordance with the law on any reported incidence of charging above the published tariffs & applicable taxes.

Due to lack of clarity on applicable GST and WHT, mobile subscribers are assuming that CMOs are charging higher taxes, which is not correct.

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