One of the key revenue generation measures to be announced in budget (2015-16) is to double sales tax rates on the import of mobile phones from Rs 150 (low price), Rs 250 (medium price) and Rs 500 (smart phones) to Rs 300, Rs 500 and Rs 1000 for all the three categories, respectively. Sources told Business Recorder on Thursday that the government is planning to double sales tax rates on the import of mobile phones to generate additional revenue to the tune of Rs 6-7 billion per annum.
The maximum rate of Rs 1,000 would be applicable on the import of smart mobile phones. Through Finance Bill 2015, amendment is expected to be made in the Ninth Schedule of the Sales Tax Act to enhance sales tax rates on the import of mobile phones. According to the budget proposal of the Federal Board of Revenue (FBR) under consideration of the Ministry of Finance for 2105-16, sales tax on import (payable by importer at the time of import) is Rs 150 on low priced cellular mobile phones or satellite phones; specifications-all cameras: 2.0 mega-pixels or less, screen size: 2.6 inches or less and key pad. It is proposed to increase the sales tax rate from Rs 150 to Rs 300 for this category of mobile phone.
Sales tax on import (payable by importer at the time of import) is Rs 250 on medium Priced Cellular Mobile Phones or Satellite Phones; specifications-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. It is proposed to increase the sales tax rate from Rs 250 to Rs 500 for this specific category of mobile phone.
Sales tax on import (payable by importer at the time of import) is Rs 500 on smart cellular mobile phones or satellite phones; specifications-one or two cameras: 10 mega-pixels and above; touch screen: size 4.2 inches and above; 4GB or higher Basic Memory and operating system of the type IOS, Android V2.3, Android Gingerbread or higher, Windows 8 or Blackberry RIM and micro-processor: 2GHZ or higher, dual core or quad core. In last budget, SRO.460(1)/2013 provided specific rates of sales tax on mobile phones and satellite phones, payable at import stage by importers and at SIM activation stage by cellular mobile operators. In order to strengthen the legal support to protect the revenue, the rates and collection mechanism were specified in a newly added Ninth Schedule to the Sales Tax Act, 1990, with enabling provisions in sub-section (3B) of section 3 of the Sales Tax Act.
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