ISLAMABAD: The Supreme Court has ruled that voice communication through the internet does not come under federal excise duty (FED).
“Internet services and facilities are wholly exempted from FED and nothing extraneous can be read into the relevant entry to qualify or restrict such exemption,” said Justice Maqbool Baqar on Friday in a judgement he authored.
It is a settled point in law that a fiscal provision of a statute has to be construed literally in favour of the taxpayer since any charge or levy of tax can be imposed in unambiguous and categorical terms only and not by presuming any intendment, said the judgement.
The verdict came on an appeal moved by Islamabad’s commissioner of inland revenue (legal) against a May 21, 2018, order of the Islamabad High Court.
The dispute revolved around the question that since internet services were exempted from payment of FED under the Federal Excise Act (FEA) 2005, would the transmission of ‘voice content’ through internet attract levy of the duty or not. In the end, the Supreme Court, however, dismissed the appeal.
Messers Wi-Tribe Pakistan, which holds a wireless local loop licence, was issued a show cause notice by the tax department for non-payment of FED on account of services falling under the definition of “telecommunication services” rendered from Jan 2011 to Dec 2012.
The issue was then taken up by a tribunal which held that since internet services were exempted from FED, voice content transmitted through internet also enjoyed such exemption.
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