Provinces to maintain 19.5% GST on telecom sector
KARACHI: Provinces will maintain the rate of general sales tax (GST) on telecommunication sector at 19.5 percent after amending service tax laws to be effective from August 1, 2011. Sources said the provincial governments are under the process of amending their provincial laws for collection of 19.5 percent sales tax from cellular sector, which are currently at 16 percent on services as per existing laws.
The provincial finance secretaries of Punjab, Khyber Pakhtunkhwa and Balochistan had given their commitment to the Ministry of Finance for imposition of a uniform rate of 19.5 percent sales tax on telecommunication services from August 1, 2011.
Last week, the federal government and provinces have taken the decision at the meeting of provincial finances secretaries headed by Federal Finance Secretary Dr Waqar Masood at the Finance Ministry. The federal government and provinces including Sindh have principally agreed to implement a single rate of 19.5 percent on telecom services to remove ambiguity or distortions in tax collection from telecom sector.
Under the current provincial tax structure, Punjab, Khyber Pakhtunkhwa and Balochistan had proposed 16 percent sales tax on telecom services. The Federal Board of Revenue will continue to collect federal excise duty in value-added tax mode on telecom sector during the month of July 2011 and a single rate of 19.5 percent would be applicable on telecom services from next month.
Source: Daily Times
Date:7/15/2011
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