SC extends suspension of tax on mobile top-up till next orders

The Chief Justice of Pakistan (CJP) Mian Saqib Nisar on Thursday issued a statement that the previous order of Supreme Court (SC) on the suspension of all taxes on mobile top-up of prepaid mobile bills will remain unchanged until the court gives another order in this regard. This means that tax deduction on mobile top-up will remain suspended until, at least, the SC’s next hearing on this case.

On the order of SC, all taxes were suspended on mobile balance cards from June 11 and the court ordered FBR and telecom companies to regulate new rules to tax consumers on mobile top-ups within 15 days. However, no new regulations have been introduced by both entities until now, and the SC has extended the leave on excessive taxes until next hearing on this case.

CJP was hearing a separate case on petroleum products’ tax mechanism, yesterday. There he remarked about the decision to suspend deduction on mobile balance that it will hold until apex court’s next orders. “The decision to suspend tax collection on mobile cards will hold until then”, Justice Nisar stated.

Just to recall, the consumers were previously paying 42% tax on per mobile card recharge. These include 19.5% sales tax that goes to the government, 12.5% of adjustable withholding tax and 10% service/ maintenance charges which go to the telecom operator (who’s service you are using) on every Rs. 100 card recharge. This was the reason that a customer was getting Rs. 61.93 balance on Rs. 100 recharge.

As the FBR and telecom companies have yet to decide on the new tax mechanism, thus consumers will have to enjoy a tax-free recharge at least for some time.