Pakistan Telecommunication Authority(PTA) has officially awarded Telenor 4G Spectrum and the license to operate it in Pakistan. The news comes after Telenor paid the withholding tax of $39.5 million (Rs. 4.13 billion) which it had earlier refused to pay.
After no other telco’s participated in the bidding of the 850 MHz 4G spectrum, it was awarded to Telenor at a base price of $395 million earlier in June. But an official license to operate was not issued to them for not paying the advance tax. Telenor took the matter to court, filing a petition against the government of Pakistan, Pakistan Telecommunication Authority (PTA), and the Federal Bureau of Revenue (FBR). The telco made their case by saying that the FBR was misinterpreting the law by applying a withholding tax on them.
Telenor submitted to the court that advance tax under the section 236A of the Income Tax Ordinance 2001 is payable where there is a sale by public auction or auction by tender of any property or goods. And since their transaction of the 4G spectrum did not qualify as an actual sale, since no one actually owns a radio spectrum, the withholding tax on them was unlawful.
The Islamabad High Court after reviewing comments from both FBR and Telenor reserved their judgment that Telenor is bound to pay the withholding tax of $39.5 million i.e. 10% of the base price. Upon the nod from the High Court, Telenor deposited the due advance tax after which the FBR issued a Non-Objection Certificate(NOC) to the PTA for issuing the 4G license to Telenor. Based on it, they can now officially provide 4G services in the country.
Source – ProPakistani