ISLAMABAD: The Supreme Court Tuesday declared that charging dual tax on mobile phone cards is illegal. “Under which law, sales and withholding taxes are being charged?” Chief Justice Mian Saqib Nisar inquired while hearing the suo moto case against charging high margin of taxes by the cellular companies.
A three-member bench of the apex court headed by Chief Justice Saqib Nisar heard the case today.
The Chief Justice asked the Finance Minister to submit the details of taxes being paid by 140 million consumers in the country on daily basis. Justice Ijazul Ahsan, another bench member, remarked that it is unlawful to charge money like this.
The bench ordered the Finance Minister to submit a summary of call rates from different countries, whereas a response from the federal, provincial governments and Federal Board of Revenues (FBR) also sought on the matter.
Attorney General Ashtar Ausaf informed the apex court that the mobile phone companies charge 19.5 per cent sales tax, 10 per cent service charges and 12.5 per cent withholding tax (WHT). The Chief Justice was astonished to learn the details and asked how can withholding tax be applied on mobile phone cards? “It is unfair to charge withholding tax from the consumers who are not entitled to pay taxes” the chief justice observed.