Islamabad High Court Issues Judgment on PTA’s Petition Against FBR
The IHC has upheld the PTA’s order for ZONG to refund more than Rs 2 billion to customers.
ISLAMABAD ( WEB NEWS )
The Islamabad High Court has issued a detailed judgment on the Pakistan Telecommunication Authority (PTA)’s petition regarding the advance tax deduction by the Federal Board of Revenue (FBR). The court directed the FBR to decide on the request for the refund of the additional tax within two months. The detailed judgment was written by Justice Babar Sattar.
According to the ruling, the FBR deducted 137 million rupees in advance tax from PTA’s bank account without issuing any prior notice, which is a violation of the Income Tax Ordinance. The court further stated that, under income tax laws, it was mandatory to issue a notice before making such deductions.
The court also ordered the Deputy Commissioner of Inland Revenue to pay a fine of 100,000 rupees to the petitioner. The petitioner claimed that the FBR reassessed the advance tax and deducted money from the bank account, while the Commissioner of Inland Revenue did not make a decision on the matter within two months. PTA had approached the Islamabad High Court in 2018 regarding the advance tax deduction. In its decision, the court also instructed the FBR to fully comply with the law in the future.
The Islamabad High Court has upheld the Pakistan Telecommunication Authority’s (PTA) order for Pakistan’s digital and telecommunication service provider ZONG to refund more than Rs 2 billion to customers.
Justice Mian Gul Hassan Aurangzeb dismissed Zong’s appeal against the PTA order, directing it to refund Rs2,028,038,584 (more than 2 billion, 28 million rupees) collected from customers on account of service/maintenance/cards / operational fee charges from 26.04.2019 to 12.07.2019.
The court observed in its decision “Cellular mobile operators, including the appellant, had been charging Rs10 from customers each time they purchased and used a prepaid card valuing Rs.100/- as assistance/maintenance / administrative service charges”.
Justice Mian Gul Hassan Aurangzeb said that the Supreme Court, in its order, expressed that the service charges could not have been validly and legally imposed on the amounts loaded by users of mobile phone devices.”
IHC dismissed Zong’s appeal against the PTA decision calling it not maintainable.
According to the court order, PTA directed Zong to provide complete details of service/maintenance charges recovered from 24.04.2019 onwards.
It was reported that Zong had charged and collected Rs2,028,038,584 from its customers between 26.04.2019 and 12.07.2019 on account of service/maintenance/card / operational fee charges.
PTA directed Zong to refund the said amount to all its concerned subscribers in the form of a balance amount without any validity restriction.
Earlier, Pakistan’s Telecom Operators Association expressed concerns over the heavy taxes slapped in budget 2024.
In a letter written to the Chairman of the Standing Committee on Finance, Salim Mandviwala, the Telecom Operators expressed concerns over the heavy taxes introduced in the budget.
The telecom sector has warned that foreign investment might withdraw from Pakistan if tax issues are not resolved. According to the telecom operators, unresolved tax issues could lead to legal complications for the government.
The letter highlights that two major market players have already decided to leave Pakistan. The telecom sector contributed PKR 340 billion in tax revenue last year, and has attracted direct investment of USD 15 billion to date, the letter stated.