Suspension of services on two occasions
By: Muhammad Yasir
KARACHI: Cellular phone companies have sought compensation from the government for their estimated losses of Rs 1 billion caused by suspension of their services twice in the last two months due to security reasons.
Sources in the telecom industry said that cellular phone companies have asked the government through Ministry of Information Technology and Telecommunication and Ministry of Interior to pay them losses against financial damages as per the law.
The companies have recently evaluated the incurred losses to the sector and put their demand to the government mutually along with details of the revenues listed.
Cellular operators had suspended services on the directives of the Ministry of Interior in four to 15 cities on Chaand Raat in August and Love Prophet Muhammad (PBUH) Day in September for security reasons particularly for avoiding any untoward incident that costs lives of people and their property.
The Ministry of Interior’s orders shall be followed by telecommunication companies as per law mentioned in Pakistan Telecommunication (Re-Organisation) Act under Clause 54 elaborated in the National Security.
Accordingly, during a war or hostilities against Pakistan by any foreign power or internal aggression or for the defence or security of Pakistan, the federal government shall have preference and priority in telecommunication system over any licensee.
Upon proclamation of emergency by the president, the federal government may suspend or modify all or any order or licences made or issued under this act or cause suspension of operation, functions or services of any licensee for such time as it may deem necessary, provided that the federal government may compensate any licensee whose facilities or services are affected by any action under this sub-section, the act said.
As the law defines that the government has to pay the compensation to telecom operators against their order implemented twice earlier.
The clause of tax exemption has been omitted in the period when services were suspended on the directives of the government. Hence estimated Rs 1 billion has been excluded from government revenues under the head of federal excise duty.
Notwithstanding any other law for the time being in force, from the date of its establishment and until it is dissolved under this act, the corporation shall enjoy total exemption from the payment of any tax under the Income Tax Ordinance, 1979, the Wealth Tax Act, 1963, and the Sales Tax Act, 1990 by Section 26 of the Act IV of 1999.
Sources said that cellular companies have sent their unanimous demands to the government in the hope that the government will restrain to take action to block services again as the results of the services blockage were not achieved in the last two episode neither it will help government next time to prevent any riots or terror incidents.
However, these companies are pessimistic about suspension of services in the future on the political grounds in the name of security measure.