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Rs. 50 bn Tax Collected From Cell Phone Users, SC Told

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The Federal government has informed Supreme Court that it collected a total of Rs. 50.029 billion in last fiscal year in lieu of taxes from mobile network subscribers.

A suo motu case, initiated by former Chief Justice Mian Saqib Nisar, over unreasonable charges and different deductions in the name of services by cellular network companies has also been opposed by the government.

Attorney General Anwar Mansoor Khan submitted the federal government’s reply in a case pertaining to taxes by cellular network companies and opposed the adjudication of matter under Article 184(3) stating that the matter is beyond the jurisdiction.

The statement added that the tax collected under section 236 of the Income Tax Ordinance (ITO) 2001 from June 13 of 2017 to June 13 of 2018 is Rs. 50.029 billion.

Tax to the tune of Rs. 3500404648 collected under Telephone Bill, Rs. 12373499475 collected under Cell Phone Bill.

Similarly, tax to the tune of Rs.17236975843 collected under Prepaid Telephone Card while Rs. 1611696472 collected under Telephone Unit, while Rs. 770090666 tax was collected under Internet Bill and Rs. 31407750 under Prepaid Internet Card.

The attorney general further submitted that the provisions of Section 236 of ITO 2001 do not violate any fundamental right.

“Where the tax liability at the end of the year is less than the tax deducted, the excess tax is refundable to the person at the time of filing of return.”

“Hardship, if any faced in filing of return or claim of refund cannot be deemed a violation of fundamental right as held by Apex Court in Ilahi Cotton Mills Limited.”

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It is submitted that Advance Tax under Section 236 has no relation with Advance Tax under Section 147.

In fact, the Income Tax Ordinance does not define Advance Tax at all.

It is further submitted that in terms of Sections 2(66) and 236 of the Ordinance a person is required to pay adjustable advance tax on telephone use and the Advance Tax so paid shall be adjusted against ultimate liability of income tax due, after it has been determined and excess amount paid, if any, is to be refunded to taxpayer.

In fact, if the person who pays Advance Tax is liable to file a return, be it a ‘zero’ taxable income, and thus claim a refund for not being taxable. But the Advance Tax is payable in terms of the provisions of the Ordinance.

The Federal Excise Duty can be so levied, but will be done if required to be levied in the forthcoming budget in the Finance Bill.


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