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November 19,2015

FBR recovers Rs870m from PIA’s foreign proceeds

Shahnawaz Akhter
KARACHI: The Federal Board of Revenue (FBR) has recovered Rs870 million on account of unpaid taxes from the international transfers of the Pakistan International Airlines (PIA), sources said on Wednesday.
The sources said the tax authority recovered the amount from the transfers of PIA from the International Air Transport Association (IATA). The Large Taxpayers Unit (LTU) Karachi issued notice to a foreign bank in Pakistan, which manages the transfers of IATA.
Tax officials said the national flag carrier was unable to defray three billion rupees under the head of federal excise duty (FED) collected on behalf of FBR between April and August 2015
The last deposit date was November 15.
On 6 November, the FBR attached around nine accounts of PIA as it failed to meet its tax obligations. The accounts remain frozen to date.
However, FBR sources said on the latest recovery the accounts would be detached. The remaining amount, if not paid by PIA, would also be recovered from IATA proceeds, they said.
IATA clearing house maintains interline accounts of transactions between the world’s airlines, aviation companies and travel partners.
The national flag carrier receives its payments on this account after every two months.
The LTU, Karachi sent several notices asking the airline to refrain from utilising the collected amount for other purposes with a warning that such act would be tantamount to an ‘offence’.
The sources the failure of non-payment of FED is the violation of the Federal Excise Act, 2005 as well as an order of the Economic Coordination Committee of the Cabinet of July 2013 under which the PIA was to deposit FED in separate accounts to deposit it to the government treasury on fortnightly basis.

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