Supreme Court Quashes Rs. 4.79 Billion Tax Demand on Universal Service Fund
The Supreme Court of Pakistan has set aside a tax ruling against the Universal Service Fund (USF), holding that the … Read More The post Supreme Court Quashes Rs. 4.79 Billion Tax Demand on Universal Service Fund appeared first on ProPakistani .
On February 29, 2024, the Universal Service Fund (USF) in Pakistan challenged a tax ruling that demanded Rs. 4.79 billion in taxes, arguing that it was not required to deduct the tax under Section 153(2)(b) of the Income Tax Ordinance. The dispute centered around payments made to telecommunications companies for projects aimed at serving underserved areas.
The tax authorities had amended the USF's assessment, claiming it had failed to comply with the tax deduction requirement under Section 153. Additionally, they sought to apply Section 21(c) of the Income Tax Ordinance, which could disallow expenses when the necessary tax deductions were not made. The case was initially heard by the Alternate Dispute Resolution Committee in March 2025, which ruled in favor of the tax demand.
However, the USF subsequently appealed this decision to the Supreme Court. On April 23, 2025, a three-member Supreme Court bench headed by Justice Munib Akhtar overturned the Alternate Dispute Resolution Committee's ruling. The court held that Section 21(c) of the Income Tax Ordinance did not apply to the USF's situation, meaning it was not required to deduct tax under Section 153(2)(b).
The Supreme Court's decision allows the USF to continue its mission of expanding broadband access and telecommunications infrastructure in remote areas of Pakistan.
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