International air tickets: Airlines unable to deduct four percent advance tax

Airlines are reportedly unable to deduct four per cent advance tax on international air tickets as the Federal Board of Revenue (FBR) has not communicated a procedure to implement section 236L of the Income Tax Ordinance 2001 so far; it is learnt here on Thursday.
Sources said the federal government through Finance Act 2014 inserted section 236L in the Ordinance and made it mandatory for every airline, issuing tickets for journey originating from Pakistan, responsible to collect adjustable advance tax at the rate of 4 per cent on the gross amount of international air tickets issued to passengers booking one way or return from Pakistan.
Replying to a question, sources said that although Finance Act 2014 came into force from July 1, 2014, field formations could not communicate a procedure to the airlines on their own because the sub-section (1) of section 236L requires the board to prescribe a mode, manner and time of collection of this advance tax.
Therefore, Large Taxpayers Unit (LTU), Karachi has now sent a letter to the board, requesting for the issuance of a procedure or a clarification regarding the Section 236L of the Ordinance, sources said. Sources further claimed that the board had not issued any procedure or clarification regarding the collection of this newly imposed advance tax on international air tickets after the lapse of three days from the date of effect of this section.
Sources said that a delay in the issuance of a procedure from the FBR would not only create problems for field formations but it would also land airlines in trouble. According to the Section 236L of the Ordinance, "Every airline, operating in Pakistan, shall collect four per cent advance tax on the gross amount of international air tickets issued to passengers booking one-way or return, from Pakistan".
"The airline issuing air ticket shall collect or charge advance tax under sub-section (1) in the manner air ticket charges are collected or charged, either manually or electronically." "The mode, manner and time of collection under sub-section (1) and time of collection shall be prescribed by the board and the advance tax collected under sub-section (1) shall be adjustable."