Supreme Court orders cellular companies to not deduct taxes on balance recharge

The Supreme Court of Pakistan today suspended all taxes that are being deducted by cellular companies in Pakistan when a mobile phone is recharged using phone cards.

A two-member bench which was headed by Chief Justice Mian Saqib Nisar issued the ruling today on a suo motu notice taken last month by the Chief Justice of Pakistan over withholding tax, federal excise duty and other taxes deducted when a phone is recharged.

Until the final verdict is announced, all cellular companies have been ordered not to deduct any kind of tax on a recharge.

Currently, when someone recharges their mobile phone, they have to pay 42% tax which includes 19.5% FED, 12.5% WHT and 10% service maintenance charges on an RS.100 card.

This amounts to nearly RS.40 being deducted from RS. 100 which leaves very little money to be used for calling, texting, or using the internet.

The CJP took the notice of these taxes on May 3rd last month and had issued notices to the federal government and all cellular companies asking to explain why RS. 40 were being deducted on RS. 100 card.

The Supreme Court has now given a two-day deadline to all cellular companies to implement the order.