ISLAMABAD: The Federal Board of Revenue is planning replacing fixed rates of the Federal Excise Duty (FED) with the standard rate of 16 percent on tickets issued to passengers travelling aboard as its has submitted a proposal to the Finance Ministry in this regard.
As per details, the proposal, if approved, will result in increase in the price of tickets for international air travel in budget (2014-15). If the standard rate of FED has been increased from 16 to 17 percent in budget (2014-15), it would further increase FED on international air travel from next fiscal year.
Currently, the FED is charged on air travel on domestic flights at 16 percent of charges plus Rs60 per ticket, and on international flights at on per seat/passenger basis. The current taxation structure revealed that the domestic travel is charged at a rate higher than standard rate. Whereas, the rates fixed for international travel are quite low. It has been proposed to charge FED on international flights at standard rate of FED.
According to the FED slabs applicable on domestic tickets, the rate of duty would be 16 percent of the charges plus Rs60 per ticket on the services provided or rendered in respect of travel by air of the passenger within the territorial jurisdiction of Pakistan.
In case of international passengers, the services provided or rendered in respect of travel by air of passengers embarking international journey from Pakistan, the rate of FED for economy and economy plus is Rs 3,840 and for club and first class, the rate is Rs6,840.
Earlier, through SRO 47(I)/2012, for passengers travelling to or from Saarc region, United Arab Emirates (Middle East) Saudi Arabia, Africa, Afghanistan, the rate of excise duty was Rs3,340 for economy and economy plus classes and Rs4,340 for club, business and first classes. For passengers travelling to or from Europe, Far East, China, United State of America, Canada, Australia, South America and others, the rate of excise duty was Rs4,340 for economy and economy plus classes and Rs5,840 for club, business and first classes, past FED rates added.
