Levies on mobile phone cards slashed

Rs11.11 will now be deducted after activating a Rs100 top-up mobile card

Usman Hanif July 15, 2019

KARACHI: Customers have started to receive almost Rs12 extra on Rs100 pre-paid card after mobile phone service operators stopped charging administrative charges, said the Pakistan Telecommunication Authority (PTA).

The mobile phone service providers used to collect 10 per cent service/maintenance charges which are now eliminated in view of the Supreme Court’s April 24 order.

“In the light of the Supreme Court’s order, the administrative charges have been abolished,” said the PTA spokesperson Khurram Ali Mehran while talking to The Express Tribune.

On June 11, 2018, a three-judge SC bench headed by the former chief justice of Pakistan (CJP) Mian Saqib Nisar suspended tax collection on mobile cards.

“Rs38.08 are deducted on a prepaid mobile card of Rs100, which is illegal,” the former CJP had noted. The bench had later suspended the tax collection and adjourned the hearing of the case for six months.

The federal and all provincial governments had challenged the order, saying if something is of public importance with reference to enforcement of a right, lawmakers should decide it and not the court.

The case was, however, taken up after retirement of Justice Nisar in January this year. It is estimated that the state faced a loss of more than Rs90 billion due to the interim order.

On April 24, the top court disposed of the suo motu case regarding deduction of taxes on the top-up of prepaid mobile phone cards and restored taxation suspended by the Justice Nisar-led bench.

The order said the SC’s June 2018 order did not record reasons nor did it determine that the imposition of the taxes was without jurisdiction. “We are also not persuaded to hold that the taxes were imposed without requisite legislation or that the six statutes contravened the Constitution."

However, the SC had added that “the cellular telecom companies are not allowed to impose any service/maintenance charge thereon as they have elected not to impose these charges."

People could not distinguish the administrative charges and taxes as both were deducted at the same time without obvious information.  When the customers bought scratched card of Rs100 they were immediately charged more than Rs24 under the head of taxes and administrative charges.

On top-up of Rs100, a consumer was slapped with Rs40 to Rs47 in total, as per customer usage as some made more calls and other sent more text messages. The sales tax is embedded in the cost of calls, differently as per every province rate.

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