PTA Clarifies on How Much Taxes Are Charged Per Rs. 100 Card Load

With reference to taxes applied on the recharge/reload of prepaid balance, PTA clarified that mobile operators are deducting only Withholding tax & General sales Tax/Federal Excise Duty on the prepaid recharge/reload after restoration of taxes by the honorable Supreme Court of Pakistan from April 2019.

A statement issued by PTA said that on the recharge of Rs. 100, the remaining balance provided to the user is Rs.88.88 (and not Rs.76 as reported on the social media).

This initial deduction is made under the head of WHT tax that’s charged at 12.5% or Rs. 11.11 per Rs. 100 load.

Once this initial deduction is made, another tax called GST, which is 19.5%, is applied on every call, SMS, data usage or for any transaction that may require billing.

So for instance if a (call or whatever) package is priced at Rs. 167 (without GST), the subscribe to this package, user will require a prepaid balance of Rs. 199.56 (Original price of package + 19.5% GST = Rs. 167 + Rs. 32.56).

This essentially means that when a user consumes (remaining balance after initial deduction of) Rs. 88.88, a total of Rs. 14.50 as GST is charged.

To roundup, here’s how much taxes are applied:

  • Total Load: 100
  • Initial deduction under the head of WHT: Rs. 11.11
  • Remaining Balance after WHT deduction: Rs. 88.88
  • Then GST deduction on per call/SMS basis: Rs. 14.50
  • Total Tax of Rs. 100 Card: Rs. 25.61
  • Remaining 74.39 Rupees can be used for making any calls/SMS

Due to lack of clarity on the deduction of GST in addition to WHT, mobile subscribers are assuming that CMOs are charging well above applicable taxes, which is not correct.

Furthermore, PTA has fixed a ceiling on call setup charges @ Rs. 0.15 per call. PTA is vigilant about the rates/tariffs being charged by CMOs & action will be initiated on any reported incidence of charging above the published tariffs & applicable taxes in accordance with the law

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