The Sindh Board of Revenue (SBR) has taken a major step towards reducing the taxes on interent services by removing provincial taxes over the broadband, DSL and other internet services. Sindh government also announced to reduce the GST on telecom services.
Previously, Sindh government imposed 19.5 percent internet tax on cusumers, which has been lifted out after this decision. Still there is an upper limit on internet usage.
If the monthly charges remain under 1500 rupees for an up to 2MB connection or 2500 rupees for more than 2MB and less than 4MB connection, there will be on tax. 19.5 percent will still be applicable for broadband connection greater than 4MB.
There has been no decision made for 3G and 4G services whether those are exempted from internet tax or not.
According to the notification issued by Sindh Board of Revenue :
The concessionary rate of 19% on the telecommunication services is available subject to thecondition that the “persons providing telecommunication service shall pass on the full benefit of the reduced rate of tax to the service recipient and shall neither invoice/bill nor collect any extra charge/amount or surcharge on the value of the services.” Persons not complying with this condition shall charge, collect and pay tax at that statutory rate of 19.5%.
For other telecom services, the Sindh government has recided to reduce the GST from 19.5% to 19%. In past, Sindh announced the lowest GST of 18% on telecom sector, but it didn’t get approval from the cabinet.