Tax on recharge


#1

What's the percentage of tax on recharge/bill of mobile services? websites mention it as 10% but it's not that and as per Government Tax Rules, it is supposed to be 10% so what's the additional 5-6% for?


#2

Dear

10% is the withholding tax while 5% are service charges ( on recharge face value)


#3

Thanks, service charges go to the Company not the Government, correct?


#4

yup!

though sometimes I feel they rip off more than that


#5

10% withholding tax on recharge value, it's refundable at year end when you file tax return.

5% service charge on recharge value

19.5% General Sales Tax on the Unit price of Services consumed.

On a 100 Rs. recharge, the Purchasing power is ~71 Rs. The rest of 29+ rs are paid in taxes and service charges, out of which 10Rs is refundable by government.


#6

Thanks for answering everyone. Don't think they have got the extra 5% on Postpaid? Only 10% + 19.5%


#7

we pay tax even on our breathing in pakistan


#8

[quote=", post:, topic:"]

Thanks for answering everyone. Don’t think they have got the extra 5% on Postpaid? Only 10% + 19.5%
[/quote]

Only 10% and 19.5%

Mobilink Postpaid and Warid Postpaid


#9

[quote=", post:, topic:"]

10% withholding tax on recharge value, it’s refundable at year end when you file tax return.

5% service charge on recharge value

19.5% General Sales Tax on the Unit price of Services consumed.

On a 100 Rs. recharge, the Purchasing power is 68.425 Rs. The rest of 31+ rs are paid in taxes and service charges, out of which 10Rs is refundable by government.

[/quote]

ok explain to me all above is taken outright away when you recharge and one is left with 68.425 to use towards calling

i want to know have you taken out the 2nd tax on already taxed 68.425, i mean when you call they charge 15% on every 1 rupee, so like 1 rupee per minute call is like 1.15 rupee per minute

if you haven’t then you ought to take into consideration that we are taxed on already taxed money, its like freakin’ scam, i have never seen chor bazari like this before if you really look at it it get triple taxed 3 times, first you pay income tax on 100 rupees, then this 100 rupees get taxed double taxed when you by prepaid card


#10

[quote=", post:, topic:"]

its like freakin’ scam, i have never seen chor bazari like this before if you really look at it it get triple taxed 3 times
[/quote]

lol It’s really like a ‘chor-bazari’. :D

One thing I want to ask we get 85.96 Rs. on a 100 Rs. card recharge? If I’m not wrong?


#11

[quote=", post:, topic:"]

Only 10% and 19.5%

Mobilink Postpaid and Warid Postpaid

[/quote]

Thanks for confirming.


#12

[quote=", post:, topic:"]

ok explain to me all above is taken outright away when you recharge and one is left with 68.425 to use towards calling

i want to know have you taken out the 2nd tax on already taxed 68.425, i mean when you call they charge 15% on every 1 rupee, so like 1 rupee per minute call is like 1.15 rupee per minute

if you haven’t then you ought to take into consideration that we are taxed on already taxed money, its like freakin’ scam, i have never seen chor bazari like this before if you really look at it it get triple taxed 3 times, first you pay income tax on 100 rupees, then this 100 rupees get taxed double taxed when you by prepaid card

[/quote]

Step by Step:

1. On a 100 Rs recharge, 10% Withholding + 5% Service Charge Deducted right away. We are left with 85 Rs.

2. Now every service you consume from your service provider like Calls or SMS, they quote the Price without GST. Assuming if both SMS and Call are uniformly charged at 1 Re + Tax. It is 1 + 19.5%, that is 1.195 per Unit

3. With 85 Rs in hand and Unit price at 1.195, ~71 units of services (1 re per service) can be consumed.

4. This means that people can have power of 71 Rs out of 100Rs. Almost 29 Rs are deducted in Taxes

Sorry for miscalculation earlier, the correct figure is 71 rs and not 68.425 Rs.

You are right, 100 Rs is already income taxed, then 85 rs are already taxed, then 71 rs is GSTaxed

Apart from Chor bazari in multi level taxing, the whole Withholding tax scheme is a kind of theft, baymani, and Khayanat. How many of you guys go and get your paid witholding tax paid on Mobile, landline, Car, Cash Withdrawal, Utility Bills?

The unclaimed withholding tax ends up as profit for Government.