FBR issues warning of arrest to PIA officials for defaulting on tax payment

KARACHI: The Federal Board of Revenue (FBR) has issued arrest warning to some officials of Pakistan International Airline (PIA) for defaulting on payment of the federal excise duty to the tune of Rs1.8 billion.
Sources in the FBR said that the Large Taxpayers Unit (LTU) Karachi on Tuesday issued a show-cause notice to the management of PIA to provide proof of payment of the last three months by September 30.
According to the show-cause notice, if the management failed to produce evidence the department would resort to arresting the officials concerned under the Federal Excise Act, 2005.
Besides, the action may also include prosecution and attachment of moveable and immovable property of the persons concerned as defined under the law.
The show-cause notice issued to PIA stated that the airline had collected FED from passengers in respect of international air travel for the periods March, April and May 2015 which was required to be deposited on July 15, August 15 and September 15, respectively, as per the decision of the Economic Coordination Committee of the Cabinet through a letter issued on July 17, 2013.
The notice said that the management of PIA had given an undertaking in writing that the defaulted amount would be paid by September 29, 2015. “However, the officers responsible for collection and depositing money have failed to deposit the government dues collected from passengers,” it added.
The notice said that the money collected on behalf of tax authorities was used for other purposes, which tantamount to committing an offence under the taxation laws. “Further, the officers have violated the directions of the ECC and provisions of laws by illegally/unlawfully holding government money,” it added.
The penalty for such an offence under the law is five times the duty involved or punishment with imprisonment which may extend to five years or both.
In order to recover the amount from PIA the tax unit issued directives to the travel agents who are collecting money/issuing tickets on behalf of PIA to hold the amount and pay it to the FBR.
Meanwhile, the LTU Karachi on Tuesday also froze the bank account of a private airline, Shaheen Air, for recovery of around Rs4 billion.
Sources said that the FBR officials managed to recover Rs225 million from the airline’s bank account. The sources said that further action had been initiated against the airline for further recovery.