Sales tax reinstated on sale of SIM card


The government has reinstated the sales tax on the sale of SIM cards through the Finance Act, 2014 and clarified the position of sales tax on cell phones on import and further supplies to end consumers.

According to the Finance Act, 2014, the consolidated position appears to be a fixed sales tax of Rs150, Rs250 and Rs500 by the importer for the respective kinds of mobile phones, a fixed tax of Rs250 on the registration of IMEI number by the cellular mobile operator (CMO) and Rs250 on the sale of SIM card by the CMO. The News reported on Thursday.

Prior to the Finance Bill, 2014, sales tax at the rate of Rs250 was to be charged, collected and paid by the cellular mobile operators at the time of supply of SIM cards. Such tax was charged by way of SRO 460(I)/2013, said A F Ferguson & Co. a member firm of the PwC network.

While placing such SRO, by way of Ninth Schedule, this entry was omitted. In the amended Finance Bill, the said entry for the payment of sales tax for an amount of Rs250 on the sale of SIM card has been reinstated.

According to the procedure and conditions for the sales tax on cell phones, the act said that in case of various kinds of cell phones specified in the act, the liability to charge, collect and pay tax should be on the CMOs at the time of supply.

At the time of import of cell phones the sales tax would be payable by the importer and the liability to charge, collect and pay sales tax payable on supplies would be on the CMO at the time of registering International Mobile Equipment Identity (IMEI) number in the system.

The government directed the CMOs to get registered with the sales tax authorities. The CMO have been further directed: “No IMEI shall be registered in his system by a CMO without charging and collecting the sales tax.”

The Finance Act said that the CMO would deposit the sales tax so collected through his monthly tax return.

The CMOs have been directed to maintain proper records of all IMEI number registered for a period of six years and such records would be required at the time of inspection, audit or verification by authorised officials of Inland Revenue.

The Finance Act said that Pakistan Telecommunication Authority would provide data regarding IMEI numbers registered with other CMO to prevent double taxation on the same IEMI number in case of switching by a subscriber from one operator to another, and to provide data regarding registration of IMEI numbers to the FBR on monthly basis.

The Finance Act said that no adjustment of input tax would be admissible to the CMO or any purchaser of cellular mobile phone against the sales tax charged.

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