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PIA, Air Blue, Shaheen Air tried in Rs 1 billion tax scam case

PIA, Air Blue, Shaheen Air tried in Rs 1 billion tax scam case

KARACHI: The hearing of sales tax case between two state owned organizations, Pakistan Customs and Pakistan International Airlines (PIA), was conducted at Sindh High Court (SHC). Additional Attorney General Attiq Shah on behalf of both organizations attended the hearing in Sindh High Court.

As per details, Pakistan Customs had raised demand of over Rs 1 billion in share of sales tax against the PIA, Shaheen Air International and Air Blue, on which airlines moved to the court.

In the hearing, the debate on Section 3(1) b of the Sales Tax Act, 1990 which relates to the imposition of sales tax was conducted and advocates of both organizations tried to convince the honorable court on their view point.

The advocate of Pakistan Customs was of the view that the sales tax is applicable on these airlines including PIA, Shaheen International Airlines and Air Blue, as the airlines were already being exempted to pay customs duty on import of machinery and parts of aircrafts, however, they are bound to pay sales tax on the import of airplanes and its machinery.

The advocate of Pakistan Customs told the court that the Air Blue and Shaheen International Airlines had paid the applicable sales tax till 2013, while the national airline PIA deposited sales tax till 2012.

Meanwhile, the legal representative of Shaheen International Airlines submitted a Constitutional Petition (CP) in SHC against Pakistan Customs in which it stated that the customs authorities have not allowed the airline administration to transport/dismantle the aircrafts and its parts.

On which Pakistan Customs’ legal representative informed the honorable court that Shaheen Air International is already involved in tax evasion of Rs 4145 million by dismantling the parts of aircrafts and transporting them in form of scrap.

The advocates of the airlines were of the view that the sales tax was not implemented on dry/wet lease or rented aircrafts and airlines imported most of the aircrafts on lease from UK, Bulgaria and Canada.

The SHC adjourned the hearing of the case till September 19, 2014. The Pakistan Customs authorities were optimistic that the verdict of the case would be fallen in their account.