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Cellular Companies, Provincial Revenue Authorities Lock Horns Over Input Tax Claims

By Faisal Ali Ghumman
Four cellular service providers in Pakistan and the revenue authorities of Punjab and Sindh have developed differences over input tax adjustment claims linked to 19.5 percent GST on pre-paid cell phone cards.
The dispute has arisen after the Supreme Court of Pakistan has recently announced the restoration of all taxes charged by cellular service providers on mobile phone top-up cards.  
The representatives of cellular companies have been persuading the provincial revenue authorities- Punjab Revenue Authority and Sindh Revenue Board– to compensate their tax adjustment claims of last 10 months.
However, officials of two authorities are of the view that during suspension period (from June 2018 onward) of taxes on top-up cards the deduction of customs duties and federal excise duties at import stage could not be correlated to the suspended period and reimbursed to the companies.
When in case there was no tax payable then how come input tax could be claimed during the suspension period.
Legal experts say that intervention of Supreme Court will be sought again to resolve the matter.
Officials fear when the Federal Board of Revenue (FBR) and provincial revenue authorities of Punjab and Sindh already fear decline in annual revenues any such pressure by the cellular companies for compensation claims will further jeopardize the efforts of meeting revenue collection targets.
They may think jacking up the rate of tax on consumers.
Information gleaned by lahoremirror.com reveals that cellular companies have been demanding Rs5 billion claims from two provinces and several meetings between representatives of companies and officials of PRA and SRB have taken place to sort out the matter.
The PRA is expected to miss annual target of Rs150 billion for fiscal 2018-19 by wide margin because of absence of telecom tax. However, SRB is most likely to achieve the annual target of Rs110 billion by the end of June 30, 2019.— LAHORE MIRROR