Telecom - Budgetary Steps

Telecom - Budgetary Steps

Duty on imported mobile phones

Specific customs duty of Rs500/- per set has been levied on imported mobile cellular phones.

Rate of FED raise on services

To generate additional revenue for meeting dire national needs, rate of FED on telecommunication services is being enhanced to 21%.

General Sales Tax (GST) raised

GST has been raised by 100bps to 16%.

Rate of FED raise on franchise

In order to meet the revenue requirements, FED rate has been enhanced from 5% to 10% on banking, insurance and franchise services.

Customs duty on Voice Cards and Vast Terminals

Customs duty on Voice Cards and Vast Terminals - meant for use in the telephone call centers – has been slashed to the lower slab of 5% with exemption from sales tax.

Recipient of services

The liability of recipient of excisable services to pay duty has been established. Accordingly, an enabling provision has been made to charge duty from the recipient of services coming from abroad and terminating in Pakistan.

Impact - Neutral to Negative

• Duty on imported mobile phone sets will help check rising consumerism in the country.

• The decision to raise FED on telecommunication services; enhance FED on franchise and establish the liability of recipents of excersiable service coupled with a marginal incraese in GST will not have any significant implact given the pass-through nature of these costs.