Exemption from Central Excise Duty on Internet and Leased Data Circuits

CBR vide its SRO No. 455(I)/96 dated 13 June 1996 imposed 40% CED on telecommunication services defined as telephone, telefax, telegraph and alike services. This duty was reduced to 25% w.e.f. 01.01.1997. In 1998, Central Excise Department issued notices to all ISPs in Pakistan to abide by this SRO. ISPAK again took up this matter with Central Board of Revenue (CBR), Minister for Information and Media Development, Minister for Finance, PTA and other relevant authorities. The Government then took a decision to exempt Internet from CED and leased Internet circuits were also exempted from CED. Later on, CBR converted CED into General Sales Tax but Internet Services and international leased data circuits are still exempted from GST.