Punjab government will take up the matter of double taxation on international air travel with the Federal Board of Revenue (FBR) for possible withdrawal of taxes imposed by the FBR on air tickets through Finance Act 2015.
Sources told Business Recorder here on Sunday that through Finance Act 2015, Punjab had levied Punjab sales tax on air tickets, chartered flights and carriage of goods by air and rail. According to Punjab Revenue Authority (PRA), both the Secretary Law and Advocate General Punjab had opined that the said levy was based on sound constitutional footing. Therefore, PRA has asked the FBR to withdraw FED on air tickets.
In this regard, Chief Minister Punjab has directed the chief Secretary/Finance Secretary/ Chairperson PRA to immediately take up the subject matter in line with the relevant provisions of the Constitution (18th Constitutional Amendment) and 7TH NFC Award. Chief Minister Punjab further desired that PRA should immediately start collection of this tax and necessary directions may be issued to PRA''s field formations in this regard.
When contacted, senior FBR official said that it is a double taxation on international air travel as both the FBR and PRA have imposed tax on air travel. The government has to see whether the PRA was authorised to impose sales tax on air tickets under Fourth Schedule of the Constitution, he added.
Section 236L, introduced through Finance Act, 2014, provided for collection of advance tax on air tickets of classes other than economy for journeys originating from Pakistan as a percentage of the gross amount of international air tickets. To properly monitor withholding tax under this section, through Finance Act, 2015, the rates have been amended and instead of applying rate on gross amount of international air ticket, fixed amount per air ticket has been prescribed which is Rs 16,000 in case of First Class and Rs 12,000 in case of Business/Club class i.e. other than economy.
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