The Sindh Government has withdrawn a sales tax exemption on internet, which was being offered to users who had bills with amounts less than Rs. 2,500 or had internet speeds below 4Mbps.
With this decision, all DSL, FTTH, 3G, 4G, cable and any other internet service will be charged at 19.5% higher rates in the province starting July 1st, 2019.
Earlier there was an exemption in sales tax for internet users, mainly to support students and those who had lower speeds.
Official notice sent to all ISPs said that all internet and broadband customers, irrespective of their speed or charges, will pay sales tax at the statutory rate of 19.5 percent. It said that taxes will be applicable from July 1st, 2019.
According to officials, sales tax on internet and broadband services had already been imposed in Punjab, Khyber Pakhtunkhwa, and Balochistan at the rate of 19.5 percent and the same rate was applied in Sindh.
Soon after the Sindh provincial government’s decision of imposing sales tax on internet services was official, Federal Minister for Information Technology and Telecommunication, Dr. Khalid Maqbool Siddiqui, condemned the move.
Terming the decision as the victimization of youth, the Federal Minister for IT said that that “youth are the major segment of our society and this decision of Sindh government will impact our youth, especially students”.
He asked the Sindh government to withdraw its decision of imposing 19.5 percent sales tax on internet and broadband services.
Ironically, the Federal Government itself withdrew exemption of FED on internet services and foreign satellite bandwidth service in the Finance Bill 2019-20.
Telecom services provided in Islamabad Capital Territory are subject to FED which was exempted prior to July 1, 2019. Furthermore, bandwidth services were also exempted from FED.
