The Federal Board of Revenue has made it mandatory for the cellular companies to collect fixed sales tax of Rs 250 at the time of sale or activation of SIM card. According to an SRO.460(I)/2013 issued here on Friday, the sales tax shall be charged on the import and supply of the mobile phones at the specified rates subject to the conditions, restrictions, mode and manner.
Under the first category, low-priced mobile phones or satellite phones (all cameras: 2.0 mega pixels or less; screen size: 2.6 inches or less; key pad) would be subject to sales tax of Rs 150 per set at the import stage. The rate of sales tax on supply (to be collected at the time of sale or activation of SIM card) would be Rs 250.
Under the second category, medium priced mobile phones or satellite phones (one or two cameras: between 2.1 to 10 mega pixels; screen size: between 2.6 inches and 4.2 inches and micro-processor: less than 2 GHZ) would be subjected to sales tax of Rs 250 per set at the import stage. The rate of sales tax on supply (to be collected at the time of sale or activation of SIM card) would be Rs 250.
Under the third category, smart cellular phones or satellite phones (one or two cameras: between 10 mega pixels and above; touch Screen: size 4.2 inches and above; 4GB or higher basic memory; operating system of the type iOS, android V2.3, android Gilgerbread or higher, windows 8 or blackberry RIM and micro-processor: 2 GHZ or higher, dual core or quad core) would be subjected to sales tax of Rs 500 per set at the import stage. The rate of sales tax on supply (to be collected at the time of sale or activation of SIM card) would be Rs 250.
As per conditions of the SRO.460(I)/2013, the sales tax on supplies of cellular mobile phones shall be charged, collected and paid by the cellular company operators on every new sale or activation of SIM card.
Secondly, the cellular company operators shall, if not already registered, obtain registration under the Sales Tax Act, 1990. Thirdly, no SIM card shall be sold or activated by a cellular company operator without charging and collecting the sales tax as specified.
Fourthly, the liability to charge, collect and pay the prescribed amount of sales tax shall be on the cellular company operator who shall deposit same through a monthly tax return in terms of section 26 of the Sales Tax Act, 1990, and rules made thereunder.
Fifthly, the cellular company operator shall maintain proper records of all SIM cards sold or activated for a period of three years, and such records shall be produced for inspection, audit or verification, as and when required, by an authorised officer of Inland Revenue.
Sixthly, no adjustment of input tax shall be admissible to the cellular company operator or the buyer against the sales tax chargeable and payable under this notification.
For the purposes of this notification, ''new activation'' shall mean a new connection or number given by the cellular company operator but does not include a change in number given to a customer due to change in package or this location in Pakistan.
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