PTA Clarifies Tax Deductions on Balance Recharge and Tariffs

In a press release, the Pakistan Telecommunication Authority (PTA) has clarified the tax deductions being made by Cellular Mobile Operators on balance recharge and tariffs after several queries were received on social media.

The Pakistan Telecommunication Authority (PTA) stated that Cellular Mobile Operators are deducting WHT (on recharge) and GST/Federal Excise Duty (on package subscription) after restoration of taxes by Supreme Court of Pakistan from April 2019.

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

As far as GST is concerned, it is applied at 19.5% 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.

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

PTA has fixed a ceiling on call setup charges @ 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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