The Federal Board of Revenue (FBR) has directed the Director-General, Large Taxpayer Unit (LTU), Karachi, to recover the unpaid amount of over Rs 1 billion federal excise duty (FED) on domestic and international air travel from Pakistan International Airlines (PIA).
Senior FBR officials told Business Recorder on Saturday that the airline had agreed to pay outstanding dues of the FED, in instalments. So far, the airline has not paid the first instalment, as agreed between the tax department and the airline. Therefore, the FBR has asked the DG LTU Karachi to pursue the matter for recovery of the amount.
Prior to this, the FBR had issued instructions to DG LTU Karachi for collection of FED as per agreed arrangement between the two sides. A few weeks back, the FBR also issued separate instructions to the airline to pay the amount as per agreed arrangement.
According to the letter, the airline was allowed to pay outstanding liabilities of Rs 1006 million, in monthly instalments, during March to May, 2009 as per following break-up: First instalment of 20 percent of the total amount, to be paid during March 2009; second instalment of 20 percent of the total amount to be paid during April 2009 and third instalment of 60 percent of the total amount to be paid during May 2009.
However, the Director General LTU Karachi informed the board that the airline had not paid instalment due in March, 2009. The airline has been accordingly advised to deposit the instalment for March, 2009, otherwise the Board would be constrained to withdraw arrangement of instalments agreed for monthly payment of the FED. Moreover, LTU Karachi will take necessary recovery action as per law/rules.
The Director General, LTU, Karachi has been allowed to take further necessary action as per law in case of non-payment of outstanding dues within the stipulated time, the FBR added. During the directors general conference of selected directors general held here on Saturday, sources said that the FBR had also taken up the issue with the DG LTU Karachi to pursue the matter.
Under the FBR excise rules for airlines, no airline or person-in-charge of aircraft shall allow any passenger to board the aircraft unless he pays excise duty. Excise duty charged on tickets which are subsequently cancelled or not utilised for travel shall be refundable to the passengers in the same manner as the fare is refunded. The excise duty shall be charged and collected by the airline concerned or through its authorised sales or travel agents at the time of issuance of tickets or at the time of chartering of flights.