Pakistan

PTV will not pay Rs1 billion in taxes, rules SC

The dispute arose because of the PTV's contract with electricity distribution companies for collecting TV fees

Hasnaat Malik May 01, 2017

The SC noted that as power companies pay their income tax on the service fee retained by them, forcing the PTV to pay tax on that amount will be illegal. PHOTO: FILE

ISLAMABAD: The Supreme Court ruled in favour of the Pakistan Television Limited (PTV) in a case wherein the Federal Bureau of Revenue (FBR) had called for the payment of over Rs1 billion in taxes pertaining to the period between 2009 and 2013 by the public television network.

The dispute arose between the FBR and the PTV because of the latter's contract with electricity distribution companies.

Under the contract, the companies would collect TV fees through their bills and forward that payment to the PTV after deducting their own service fee.

The FBR argued that unless the PTV had deducted the withholding tax from the service fee, it was not entitled to claim it as an expense under its tax returns.

The PTV, however, had challenged this contention earlier but had lost its appeals before the Islamabad High Court.

Subsequently, the PTV had hired the services of lawyer Makhdoom Ali Khan to plead its case.

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A three-judge bench of the apex court, headed by Chief Justice of Pakistan Saqib Nisar, noted that as the power companies had paid their income tax on the service fee retained by them, forcing the PTV to pay tax on that amount would be illegal and also result in double taxation.

An important issue in the case was as to whether or not the orders of the Appellate Tribunal Inland Revenue could be reopened by the high court where the tribunal had not decided an issue of law.

The court accepted the argument of the network's counsel that a high court could not decide a question of law which the tribunal had not reached a conclusion upon.

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The bench observed that such a view would permit the tribunal to control the jurisdiction of the high court simply by not deciding questions of law before it.
The court accepted the PTV’s argument that it was not required to deduct withholding taxes from the service fee.

It held that the television network would only have been liable to deduct withholding tax if it had received the full amount of the TV fees.

COMMENTS (5)

Amir | 7 years ago | Reply the fee collected by PTV should be abolished as they are now a commercial body asking payments for ads from private sector. previously there was no source of income other than fees. A tax collected from citizen to project political party agenda only on the channel

Hasan Khan | 7 years ago | Reply FBR has become very un-realistic,dysfunctional and is raising illegal and un-justified demands. Forcing taxpayers to withhold tax without compensation is slavery

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Mirestan | 7 years ago | Reply PTV earns a fee from Pakistani public Rs 35 per month compulsory from each individual who has an electric connection and pays utility bill. Estimated amount is more than 6 Billion Rupees plus they got relief from the court not to pay income tax. This TV station run by the government has no utility for public. All over the world Government TV is free. service from the Government. Please shut this extortion with immediate effects. enough is enough.

Kala_bacha | 7 years ago | Reply This money belongs to people of Pakistan as it was an extortion money collected by ptv through electricity bills. This money neither belongs to ptv or fbr.

Lolz | 7 years ago | Reply How is the fee collected by PTV through utility bills is lawful/legal and that irrespective of income level of the payer. In this way, all the government institutions could seek money by taxing citizens through utility bills.

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