According to sources, the largest revenue collection arm of the Federal Board of Revenue had served a recovery notice under section 14(3) of the Federal Excise Act, 2005 read with rule 60(1) (d) of the Federal Excise Rules, 2005 to the International Air Transport Association (IATA), Pakistan; informing that the government dues amounting to Rs 7 billion for the tax periods up to June 2017 were recoverable from PIAC on account of FED.
The notice stated that the national flag carrier had not deposited the FED into the exchequer as required under the provisions of Federal Excise Act, 2005. Therefore, IATA has been restricted to direct its present and future proceeds from BSP settlement to the government treasury through pay order till the defaulted tax recovery.
Sources said: "The national flag carrier, which collects Rs 10,000 FED from international business class passengers, Rs 5,000 from economy class passengers and Rs 2,500 from domestic passengers, is liable to deposit the collected FED into national kitty within 45 days.
Replying to a question, sources said that FED collection was directly linked with the passengers load but PIAC on an average collected Rs 800 million FED every month. Following the said notice served to the IATA, the national flag carrier has now given Rs 1.85 billion FED and promised to pay the rest of the recoverable tax by September 24, 2017.
Copyright Business Recorder, 2017