ISLAMABAD: Supreme Court on Tuesday summoned reply from provinces, mobile companies and Federal Board of Revenue over sales tax and service charges cut on mobile phone cards.
The bench headed by Chief Justice Mian Saqib Nisar conducted hearing of the suo motu notice of high levy being charged on mobile phone cards in the country.
Attorney General told court that the consumers are paying 42 percent tax, including 19.5 percent FED, 12.7 percent withholding tax (WHT) and 10 percent service/ maintenance charges on every Rs.100 card.
The CJP asked, “How WHT is being taken over the use of mobile phone? The WHT should be explained in the court.”
“WHT is not received from government and diplomats,” Attorney General told court.
“How will those who do not pay the taxes take it back? Why WHT has been imposed on those people who are not eligible to pay tax? Only that person will pay WHT who is entitled to give tax,” remarked the Chief Justice.
“Why service charges are received?” asked Justice Ijazul Hassan. “The companies can better explain this,” replied the Attorney General.
FBR told court that the provinces are receiving the sales tax. “Under which law are they deducting 19.5 percent sales tax? Isn’t receiving double tax exploitation? The provinces should elucidate it in the court,” directed the CJP.
Justice Ijazul Ahsan remarked that service charges are also a type of tax. “42 percent amount is subtracted as tax. It is illegal withdrawal of money from the public,” he said.
“Wait till I review the prices of petrol and diesel. The tax on them will also be inquired,” asserted the CJP.
The court while concluding the arguments adjourned the hearing for two weeks.