Govt Proposes to Impose FED on Internet Services

The government has proposed the withdrawal of exemption of Federal Excise Duty (FED) on internet services and foreign satellite bandwidth service in the Finance Bill 2019-20.

According to details, this FED was exempted but now this exemption will be withdrawan.

FED rate for federal capital is 17 percent while in provinces its charged 19.5%.

According to the budgetary documents, the government has proposed the withdrawal of exemption of FED on internet services and foreign satellite bandwidth service.

Telecom services provided in Islamabad Capital Territory are subject to FED under the Federal Excise Act, 2005. However, internet services are presently exempt from payment of FED under Third Schedule to the Federal Excise Act, 2005.

Further, bandwidth services are also exempted from payment of FED. In order to protect local services providers, it is proposed to withdraw exemption on services provided by foreign satellites and maintain exemption only on terrestrial bandwidth services.

The government has proposed the withdrawal of 3% Value Addition Tax on Mobile Phones. It is proposed to exclude mobile cellular phones and satellite phones from purview of 3% value addition. This 3% regime is also proposed to be transferred from the Sales Tax Special Procedures Rules, 2007, to the new Twelfth Schedule to the Act.

Further to incentivize local industry, the government has proposed rationalization of tariff structure for SIM card manufacturing industry.

According to the Finance Bill, 2019 rate of levy on mobile hand sets reduced as no levy imposed on imported phones valued under $100, Rs. 400 levy proposed on imported mobile phones worth $100 to $200 (which is currently Rs 500), Rs. 1,200 levy proposed on imported mobile phones worth $200 to $350 (which is currently Rs 1500), Rs.2800 levy proposed on imported mobile phones worth $350 to $500 (currently is Rs 3500) and Rs. 5600 levy proposed on imported mobile phones worth above $500 (which is currently Rs 7000).


    • Hats off to you for pinpointing this blunder on Propkaostani part.I also got bamboozled when went through the headline and found the opposite.The credibility of this site is falling day by day.

    • They don’t and they don’t expect their readers to read anything either. They only write so that adsense has some context for the ads.

      • why r u getting jealous if someone is working hard to earn. Isn’t it their right.

        Jao yaha se aur kuch kam dhandha kar k khud bi kama lo. Veli awam ko fazool bolne k alawa kam nahi ha aur koi.

    • It says ”withdrawal of exemption of Federal Excise Duty ”.. Hence meaning that the exemption which was given before will withdraw and the FED will be imposed on public.

    • I cant really believe that some people cant comprehend a basic sentence. “Withdrawing exemption” means that duty will be imposed now

    • I think it is you who need to read what you are writing and what is written. Impose of FED and Withdrawal of Exemption of FED, what the difference?

  • This article is all over the place. First you say they are withdrawing exemptions then you say that terrestrial providers will retain exemptions. Then you somehow introduced islamabad into the article. Is this only about that one city and not the whole country?

  • So GST and WHT is not enough? They want to implement FED now TOO! This Govt. is the worst. Imran manhoos ne icecream khane pe be 13pc GST laga dia dogi ne.


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