GST on mobile phones may be doubled

WEB DESK: The government is planning to double sales tax on the import of mobile phone sets in budget (2016-17).

Sources told Business Recorder here on Friday that the proposal under consideration is to substantially raise sales tax on the import of cell phones from next fiscal year.

On the other hand, the government is not considering any measure to dispose of thousands of confiscated mobile phones by different collectorates.

The Federal Board of Revenue (FBR) can generate handsome amount of revenue through auction of the confiscated smuggled phones.

So far, the Federal Board of Revenue (FBR) has collected Rs 8.06 billion sales tax on the import of mobile phones during 2015-16 as compared to projection of Rs 8 billion for the said period.

In budget (2016-17), it has been proposed to enhance sales tax collected at the import stage from Rs 500 and 1000 to 1000 and 2000 respectively for medium and high category/smart phones.

In last budget (2015-16), sales tax rates on cellular mobile phones were revised upward. Therefore, regulatory duty @ Rs 200 per set was removed on mobile phones w.e.f. date of application of revised sales tax rates ie 1st July, 2015.

During last budget, the FBR had increased rate of sales tax on mobile phones to Rs 300, 500 and 1000, from Rs 150, 250 and 500, respectively, depending on features in the mobile set.

On the other hand, customs officials have shown surprise over the said proposal of Inland Revenue Wing of the FBR. The condition of over thousands of confiscated smuggled mobile phones has been deteriorated at different ports.

Thousands of smuggled smart phones have been confiscated but the customs is unable to conduct the auction due to conditions of the PTA.

As the Pakistan Telecommunication Authority (PTA) has placed the condition of type approval for the imported mobile phones, it is unable to auction the phones confiscated by the customs at airports etc Interestingly, the government is losing huge revenue on account of delay in the auction of mobile phone sets.

The condition of type approval by the PTA for the smuggled phones is unnecessary. The smuggled phones have been seized and ready for auction under the law. But the customs is unable to do the same due to such unrealistic conditions on the smuggled phones.

Resultantly, all such confiscated smuggled goods would become junk in coming days.The FBR can propose measures to ensure auction of these thousands of mobile phones through special permission, etc, to generate additional revenue, they added. -Business Recorder