Punjab imposes tax on internet; students exempted

The government of Punjab has declared the internet service a taxable item in the budget 2017-18 except for the students who could be a driving force for an IT revolution in the province.

Although, there was nothing related to the telecom sector in the budget speech of Provincial Finance Minister Ayesha Ghaus Pasha, however, the details in the finance bill tell a different story.

Only the student internet packages have been exempted from the tax.

As per the details which MORE received soon after the budget speech, a screenshot of which is also highlighted below;

internet tax punjab finance bill

“Internet service, whether dial-up or broadband, including email services, data communication network services (DCNS) and value added data services, valued at no more than Rs. 1500 per month per student.”

The clause suggests that any internet package that is not more than Rs. 1,500 of value will be exempted from sales tax. The interesting part is that package has to be for a student. It also implies that any internet connection or a package which is not designed for students no matter it is priced at/under Rs. 1500 will be taxed. And indeed everything above the yardstick will be taxed as well.

Punjab government had earlier put a 19.5% GST on the internet which was later revoked after successful lobbying from the telecom companies. Although the finance bill doesn’t tell the applicable tax percentage clearly, however, it is likely to be what was abolished earlier.

An official of the telecom company while commenting on the decision predicted the re-birth of various student packages from the telecom companies in the coming days.

The telecom sector has been demanding relief from the federal and provincial governments. Although, federal budget lessened the WHT on a mobile phone, however, it doubled the import duty on mobile phones in the recent budget.

It is interesting to recall that PTCL has been the only company that offered student packages.

Since the tax has been enforced, we may now see dozens of internet packages for students.

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