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Over Rs1b non-payment of ST by airlines, Pak Customs moves court

Over Rs1b non-payment of ST by airlines, Pak Customs moves court

KARACHI: Federal Board of Revenue may suffer loss of over one billion rupees due to clash between two major entities of the state, Pakistan Customs and Pakistan International Airlines (PIA) over non-payment of due sales tax.

Sources in Pakistan Customs informed Customs Today that the three airlines including Pakistan International Airlines, Shaheen International Airlines and Air-Blue have not yet paid their sales tax worth over one billion rupees for the last three years.

Both the national institutions, Pakistan Customs and PIA, have moved court for using their legitimate right to defend their viewpoints.

In the fresh development, the Sindh High Court has fixed June 18, 2014 as the date of hearing the case. While the other two airlines i.e. Shaheen International Airlines and Air Blue have already taken stay-order from the court.

On one hand, the national carrier was of the view that the air-planes were purchased on lease and no importation has been done in this regard, so no sales tax can be implemented.

On the other hand, Pakistan Customs was of the view that whatever comes from sea, air or land routes must fall in category of imports and the planes owned by those airline companies were imported from United Kingdom, Bulgaria and Canada.

Sources further told this scribe that the customs duty has already been exempted on importation of machinery under SRO 575. However, the airline companies should pay their sales tax for the remaining years, as they had paid the similar taxes until 2010.

“FBR is facing a shortfall of over one billion rupees due to the non-payment of sales tax by the airline companies. Pakistan Customs will succeed to recover the said amount”, the sources added.