Service tax on mobile recharge needs to be determined: CJP

Chief Justice Asif Saeed Khan Khosa on Monday remarked that service tax on mobile phone pre-paid cards and recharges needs to be determined as a huge sum of money is deducted from the pocket of masses due to the law. A three-judge bench headed by Chief Justice Asif Saeed Khan Khosa was hearing the issue of suspension of high tax/other charges by mobile phone companies on cell phone recharge.

On behalf of the federal government, the additional attorney general submitted a report about taxes charged by cellular service providers as well as the details of all mobile phone taxes being collected over the past one year.

During the proceedings, Chief Justice Khosa asked the additional attorney general what he would like to say about Article 184(3) of the Constitution, to which he said that ‘deduction of tax of mobile recharge does not fall in the category of people’s interest, but the Supreme Court has stopped service tax on mobile phone pre-paid credit.

The federal and provincial governments have been arguing that oversight over mobile phone taxes does not fall under the Supreme Court’s powers as defined in Article 184(3) of the Constitution.
The Article 184(3) of the Constitution states: “[…] the Supreme Court […] if it considers that a question of public importance with reference to the enforcement of any of the fundamental rights conferred by Chapter I of Part II is involved, has the power to make an order of the nature mentioned.”This prompted the top judge to say that it needs to be determined whether there is a fault with the law or there is any problem with its implementation by the government to generate revenue.

“Money is being deducted from the pocket of the masses due to wrong implementation of the law and the other issue is: can the government deduct tax in advance?” he observed.

Another member of the bench Justice Ijaz-ul-Ahsan questioned how a citizen can be forced to pay tax if he does not fall in that category, saying there should be some mechanism for the people who do not fall in the tax net.

The attorney general for Pakistan said that a consumer has to pay advance tax on mobile cards, adding if somebody does not fall under tax net, he can claim a tax refund.

This angered Justice Ahsan who asked the attorney general if a fruit vendor should approach the tax commissioner seeking refund. He said, “The state should be sincere with his people, and to say people who claim tax refund will be facilitated and those who don’t, is not that a state should opt for.”

The Chief Justice said that the government should find a solution to the issue instead of assuming that every citizen can afford to pay tax.
The hearing of the case was adjourned till Wednesday (tomorrow).