Here comes a sigh of relief for mobile phone users in Pakistan from the windows of the Supreme Court of Pakistan. According to media reports, the Chief justice of Pakistan Mian Saqib Nisar suspends all sorts of service charges, withholding tax and General Sales Tax on mobile cards. This will essentially mean that Rs. 100 will be credited in full to the user’s account without any deduction.

Earlier in May this year, the CJP took a Sou Motu notice on excessive taxes on mobile cards. As per existing practice, a Rs. 100 card would load almost Rs. 68 to the user’s account while the rest would be deducted as Withholding Tax and GST. A brief breakdown of this deduction is as follows:

  • 19% Federal Excise Duty (FED)
  • 12.5% Withholding Tax (WHT)
  • 10% Service/Maintenance Charges

While hearing the same case in Lahore registry of Supreme Court on Monday, a three member bench headed by CJP ordered mobile phone companies to suspend all sort of taxes and service charges on mobile cards with effect from June 13th, 2018. However, the tax suspension will be valid for 15 days while the future of this tax deduction or exemption will be decided on the basis of upcoming hearing.

Moreover, the Apex Court has also asked the federal Board of Revenue (FBR) to submit a detailed report on how a citizen who does not fall under tax net can be relieved. Let us see how FBR responds on next hearing. Meanwhile, mobile users can enjoy the 100% airtime on their recharges for 15 days.