Seeking three years' record of FED on tickets: BARIP critical of LTU Karachi's directive

Board of Airline Representatives in Pakistan (BARIP), Karachi has expressed serious concern over the notices issued by Large Taxpayer Unit (LTU) Karachi seeking three years record of FED paid on tickets sold both within and outside Pakistan.
Sources told Business Recorder on Saturday that the BARIP has shown surprise over the directive of the LTU Karachi for submission of the FED record for the last three years despite the fact that airlines are regularly providing all information through the e-filing system of the Federal Board of Revenue.
The e-filing record of the airlines is available with the FBR and airlines have been asked by the LTU Karachi to provide all tax records to the Karachi-based tax authorities during the period under review. The BARIP is unable to understand when the relevant information is already available with the tax department in electronic format, why thousands of manually maintained pages would be compiled for submission to the LTU.
The electronic returns could easily be accessed by tax officials and demanding complete sales tax and federal excise record for the past period seemed to the unjustified. In this connection, the BARIP has lodged a formal protest with Shahid Hussain Asad, Member (Inland Revenue), FBR. According to the BARIP, airlines have been receiving letters from the LTU regarding the collection and payment of FED on tickets sold both within and outside Pakistan.
When airlines submit the payment of FED to the FBR, all relevant information is provided as per FBR's own requirement as per E-filing on the Web Portal. For airlines to now resubmit the same for a three year period is a cumbersome and voluminous exercise and documentation in paper form will run into thousands of pages for small operators and tens of thousands of pages for the larger carriers.
The BARIP has been given to understand that the reason for carrying out this exercise is to determine the amount of FED collected on tickets sold outside Pakistan. The tickets sold outside Pakistan where FED is attracted have already been reported by the BARIP. One Way tickets that are sold outside Pakistan i.e. on a ticket sold LHR/KHI or any destination to Pakistan, FED has not been collected and the reasons for the same were already communicated to the FBR. The BARIP had informed FBR the reasons as to why FED cannot be collected on One Way tickets sold outside the country. No reply was ever received to the same. To elaborate, is it possible for all airlines to collect U.K Value Added Tax (VAT) on a One Way ticket sold in Pakistan for the sectors KHI/LHR and then deposit the same with Her Majesty's Revenue & Customs Department? The obvious answer is "NO". Similarly, a One Way ticket sold in LHR for the sector LHR/KHI, the airline is not in a position to collect a Pakistani FED on revenues that are not accruing to Pakistan in any way, shape or form, BARIP stated. Apart from the above illustration, as we have mentioned, in our past letter to the FBR, many a times more than one airline is involved in a journey.