Probe into GST evasion by cellular firms sought

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ISLAMABAD, July 3: The Transparency International Pakistan has asked Pakistan Telecommunication Authority (PTA) to hold an inquiry into the alleged evasion of GST worth Rs47 billion against non-deposit of GST on hidden sale of pre-paid cards by five cellular companies operating in the country.

TIP has received a complaint wherein the complainant reported that in 2003-04 when the total connections were 5 million, and annual revenue was Rs27.84 million, GST paid to the government was Rs12.1 million. This was 44 per cent of collection, though the rate of GST was 19.5 per cent, TIP Adviser Syed Adil Gilani wrote in a letter to PTA Chairman Muhammad Yasin on Tuesday.

According to contents of the letter, the complainant reported that in 2010-11 when the connections were 118 million, the approximate value of pre-paid cards sold per month by the five companies was Rs31.65 billion.

In the revenue of the five companies, post-paid customers fee and users’ billed charges paid through check, inter change charges are not included.

The average monthly collection of revenue reported by the complainant for 2010-11 is approximately Rs42 billion per month, which comes to Rs504 billion for 2010-11.

Against this reported collection, the five cellular companies have reported on PTA website revenue of Rs262.76 billion for 2010-11, thus a shortfall of Rs241.24 billion in revenue collection has been identified by the complainant. The evasion of GST at 19.5 per cent amounts to approximately Rs47 billion.

TIP asked PTA to examine the complaint, and check the reporting procedure of cellular companies’ sale of pre-paid cards.

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