Duty and sales tax on mobile phone parts abolished

ISLAMABAD (August 11 2004): In a major move to attract foreign investment in the mobile phone sector, the government has abolished custom duty and sales tax on the import of its accessories.

In this connection, the CBR has amended SRO 390(I)/2001 through SRO (I)/2004 here on Tuesday to take away the duties and taxes on the mobile phone accessories.

The CBR has withdrawn GST and custom duty on the import of hands-free kit, wrist strap and CD Room with PC Software.

Official sources told Business Recorder that the decision would not have any revenue implications as exemption under SRO 390(I)/2001 of June 18, 2001, is already available on the import of cellular telephone sets (handheld) which include one battery and a battery charger.

The policy markers opined that the application of duties and taxes on the mobile phone accessories seems to be not justified as international mobile phone companies are making huge investment in the country and charging GST and custom duty on the import of small accessories like wrist strap, hands free kit and CD Rom with PC-Software does not make any sense.

Thus, CBR has withdrawn taxes on these mobile phone accessories to simplify documentation for all concerns.

They added that the CBR's earlier instructions to all collectors of customs for charging custom duty on the accessories automatically stand withdrawn.

FOLLOWING IS THE TEXT OF THE NOTIFICATION ISSUED ON TUESDAY: In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), sub-section (3A) and (6) of section 3, clause (b) of sub-section(1) of section 8, clause (a) of sub-section (2) of sections 13 and section 71 of the Sales Tax Act, 1990, the Federal Government is pleased to direct that the following further amendment shall be made in its Notification No S.R.O.390(I)/ 2001, dated the 18th June, 2001, namely:-

In the aforesaid Notification, in the Explanation-1, for the words “one battery and a battery charger” the words and commas “one battery, a battery charger, hands free kit, wrist strap and CD Rom with PC-software” shall be submitted.

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