CBR objects to levy of CED on Internet service providers

Directorate General, Intelligence and Investigation, Customs and Excise is still allegedly involved in framing bogus cases against different service providers and not following the Central Board of Revenue (CBR) directives clearly giving correct interpretation of rules. The CBR has conveyed its reservations in a notice issued on Thursday to the DG Intelligence Headquarters regarding levy of central excise duty (CED) on telecommunication services provided by the Internet Service Providers.
The CBR has conveyed to the Director, DG Intelligence, Customs and Excise, Islamabad that despite issuance of repeated instructions on the issue, the staff of the directorate is still flouting the law, by framing charges against the taxpayers,.
It has been brought to the notice of the Board that even after issuance of an emphatic clarification by the Board that the "users of VSAT Terminals who are using VSAT for the purpose of extending internet or Data Communication Services only (Such as IPOs and DNOPs) are not liable to excise duty under SRO.333(I)/2002". In violation of CBR's rules, the staff of the directorate is still framing contravention cases against these service providers.
The CBR has warned the directorate that the staff should not indulge in making frivolous cases. Bogus cases could not be pursued at the judicial for a - only to be rejected at different stages of the judiciary, instructions added.
Sources said that this is the second glaring example of wrong cases framed by the directorate. Recently, the CBR refused to levy central excise duty (CED) on the services provided by the 'Vehicle Tracker System' (VTS), which proved that the DG Intelligence and Investigation wrongly slapped 15 percent GST on the services provided by the VTS company.
In another instance, the directorate framed cases against the users of VSAT Terminals who are using VSAT for the purpose of extending inter-net or Data Communication Services only. The CBR rejected the viewpoint of the directorate in such cases as well.
The only question remaining to be answered is as to who framed false cases against the service providers and what action the CBR will take against the officials of the directorate, who refused to follow the CBR's instructions, sources added.