FBR seals off Shaheen Air headquarters over tax default

KARACHI: The Federal Board of Revenue (FBR) on Friday yet again sealed the head office of Shaheen Air International for defaulting on a payment of around Rs1.4 billion in Federal Excise Duty (FED), reducing the company's operation to only hajj flights.

The financially beleaguered airline has failed to pay the amount for about last three months. Previously, the FBR had sealed Shaheen Air’s office in June 2018 but after negotiations and on a promise of payment their head office was unsealed in less than an hour.

The airline, instead of paying the outstanding amount, moved to higher court for relief against recovery by the FBR.

The Sindh High Court in the last judgment had directed the airline to pay at least 50 percent of the amount to FBR as was instructed by the Supreme Court of Pakistan in suits filed in financial matters. The sources in the tax authority said the airline failed to pay up in the last hearing on August 15, 2018.

An FBR official said the airline collected FED at the rate of Rs5000/ticket from international passengers and Rs2500 from domestic passengers. “But they failed to deposit the amount in the national kitty,” the official added.

“When FBR sealed their office the last time, the airline submitted post-dated cheques with the board and had their offices unsealed, but the cheques bounced.”

Today, the official said, the airlines sought to make the outstanding payments in installments, once again presenting post-dated cheques,” the official said and added that the FBR refused this offer and now the office of the airline would remain sealed till payment.

With this closure of head office, the airline cannot continue its domestic and international operations. Meanwhile, Civil Aviation Authority (CAA) has already barred the airlines from conducting operations. The FBR official further said the airline had only been allowed to continue its hajj operation.