FBR takes step to recover Rs2.2 billion from PIA

KARACHI: The Federal Board of Revenue (FBR) has taken a major step for the recovery of Rs2.2 billion from the Pakistan International Airlines (PIA) as the revenue body froze its clearance proceeds from the International Air Transport Association (IATA), sources said on Friday.
The step has been taken following the failure to recover the amount despite attaching the nine declared bank accounts of PIA, which remained inactive since last Friday (November 06).
The sources said the accounts of PIA related to IATA clearance are maintained at a foreign bank.
They said FBR said as transactions made to PIA account the same should be deposited in favour of tax authorities.
IATA Clearing House provides services of interline accounts between the world’s airlines, airline-associated companies and travel partners. The national flag carrier receives the payment bi-monthly and the next clearance is likely on November 16 or November 18, the sources said.
The sources said the recovery has been pending for the last many months as the outstanding amount has accumulated to Rs2.2 billion as the federal excise duty for the months, March – June 2015.
The prolong attachment of the account was due to repeated assurance of the PIA in making payment but all went in vain.
Previously, the Large Taxpayers Unit (LTU) Karachi, in various notices, asked the airline to refrain from utilising the collected amount for other purpose with a warning that such an act would be tantamount to an offence.
In September 2015, the LTU Karachi issued a show cause notice to PIA, stating 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 (ECC) of the Cabinet through its letter issued on July 17, 2013.
The LTU Karachi issued an arrest warning to senior officials of the PIA in September for violating the clear instructions of ECC.