Punjab annuls GST on internet

Jawwad Rizvi
Thursday, July 30, 2015
From Print Edition

The Punjab government has finally revoked the imposition of 19.5 per cent General Sales Tax (GST) on internet use in the province in a bid to boost internet penetration and to accomplish its E-governance dream.


Punjab Finance Minister Dr Ayesha Pasha talking to The News confirmed that Punjab Chief Minister Shahbaz Sharif had given the go-ahead and a notification in that regard will be issued on Thursday (today) by the Punjab Finance Department.


On delay in the issuance of the notification of revoking the internet tax as it was earlier announced after a Cabinet meeting held in June for the approval of Punjab budget 2015-16 and later announced on the floor of the house, the minister said there were some confusions among the government officials. “The issuance of the notification was delayed due to confusion, which is now cleared in today’s meeting, so the notification would be issued”, she said. She added there was a delay in the process of issuing the notification as well which had also been completed.


The minister said Punjab revoked the tax on internet to boost IT and telecommunication industry. “The telecommunication industry has heavily invested in the country by purchasing 3G/4G licence”, she remarked. She said the Punjab government had withdrawn the tax, but Sindh and KP governments were collecting the same.


Ayesha Pasha said it was the government’s policy prerogative to revoke the tax temporarily.


“It is the governments’ prerogative to exempt any sector from tax for sometime or more, or bring it anytime into tax net”, she said, adding the government will review it in next year budget taxation proposals.


On a question about revenue loss to the government after revoking the tax, she said it was significant. However, the Punjab government wants internet penetration in the province for the E-governance of the province. To accomplish the E-governance more and easy access of the internet is crucial for the province, she added.


Punjab Information and Technology Board (PITB) Chairman Dr Umar Saif through its Facebook account status stated that the Punjab had compromised Rs 5 billion revenue loss for the internet penetration in the province.


According to a telecom industry official, the Punjab government will collect almost Rs 3.5 billion to 4 billion revenue through this tax. On Rs 5 billion revenue collection, he said the government had projected on future forecast basis.


The data users are gradually growing, if it will be taxed then the growth might be hampered, he believed