Home »Budgets » SROs-Excise » No CED on incoming calls: CBR

On the recommendations of Pakistan Telecommunication Authority (PTA), the government has given exemption of central excise duty (CED) on payment (amount) received by private telecom operators on the international incoming calls under agreement with foreign telecommunication companies. The CBR has issued SRO 762(I)/2004 to amend SRO 333(I)/2002 here on Saturday.

The exemption of excise duty on international incoming calls was already available to Pakistan Telecommunication Company Limited (PTCL), which has been extended to Long Distance (LDI) recognised operators licensed by PTA.

Recently, the PTA has issued licences to a number of LDI operators, who would avail exemption of excise duty on the incoming calls.

Pakistan Telecommunication Authority (PTA) had proposed to the CBR to take away excise duty on the on the international incoming calls for the Long Distance (LDI) operators and Local Loop (LL) operators from Access Promotion Contribution (APC).

According to PTA, it has been clarified that LL (Local Loop) operators will not be involved in any bilateral agreements with foreign telecommunication companies. However, they will share the revenues of international incoming calls with Long Distance (LDI) operators. Since the LDI operators will be exempted from Central Excise Duty (CED) on international incoming calls, it would be unjustified to collect CED from LL operators on international incoming calls.

As regards the definition of APC, following clauses of Telecom De-Regulation policy have been referred.

'(4.3.1), At present, net incoming international traffic generates a financial premium over the cost of conveying and terminating the traffic into Pakistan. Although historically this premium has been large, it has been steadily reducing, in-line with global trends.'

'(4.3.2), As long as the premium continues to exist, a reasonable portion of the premium is proposed to be used to promote infrastructure expansion. The portion of the premium applied to promoting infrastructure expansion is referred to as the "Access Promotion Contribution" ("APC")'.

Following is the text of the notification issued on Saturday:

In exercise of the powers conferred by sub-section (1) of section 12A of the Central Excise Act, 1944 (I of 1944), the Federal Government is pleased to direct that the following further amendments shall be made in its notification No. SRO 333(I)/2002, dated the 15th June 2002, namely:-

In the aforesaid notification, in Table-II, in column (1) against the heading/sub-heading number "Respective sub-heading 98.12" in column (2), in clause (v), after the word "the" occurring for the first time the words "Long Distance International licence holders including" shall be inserted.

Copyright Business Recorder, 2004


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