KARACHI: The Sindh High Court (SHC) has summoned Salman Aslam Butt, the attorney general of Pakistan, to seek his perspective over the sales tax dispute between Pakistan International Airlines (PIA) and the Pakistan Customs.
The reliable sources confirmed Customs Today that the SHC has asked the attorney general to present before the court on Wednesday (today) and clear the government stance over the said issue.
The Pakistan Customs has raised a demand of over Rs 1 billion in share of sales tax against the PIA, Shaheen Air International and Air Blue, as these airlines had not paid sales tax on the import of airplanes and its machinery since 2011.
The airline companies including PIA, Shaheen Air International and Air Blue had moved the court against the sales tax demand by the customs authorities.
The airlines companies were of the view that the airplanes/air buses were purchased on lease and not imported, on which the condition sales tax does not apply.
On the other hand, Pakistan Customs argued that whatever comes from sea, air or land routes fall in imports category and liable to duty so airlines have to pay duty on import of planes from United Kingdom, Bulgaria and Canada.
A senior officer in Legal Department of Pakistan Customs informed Customs Today that the revenue earning materials fall into import according to the Customs Act, 1969 and those airlines have been earning a handsome amount of revenue from their routine flights across the world.
He further disclosed that these airlines companies have imported machinery and planes without completing legal formalities of filing goods declaration form.
It is pertinent to mention here that the Model Customs Collectorate (MCC) Preventive has already made a contravention report against Shaheen Air International on its alleged involvement in a huge tax evasion of Rs 4.14 billion by dismantling of around 47 aircrafts at its yard without paying duty on their import.
The Collectorate of Customs Adjudication-I have also served show-cause notice to entire administration of Shaheen Air International including its CEO and the managing director.
Last hearing was held at June18, 2014 in which airlines have taken stay-order, however; the Sindh High Court (SHC) has summoned Attorney General of Pakistan to take his version over the said issue.
A senior officer revealed that the Federal Board of Revenue (FBR) has suffered billions of rupee loss in share of sales tax since 2011due to nonpayment of duty on planes import, adding that the customs duty has exempted now on the import of machinery under SRO575. However; the airlines companies have to pay sales tax for the remaining years after 2010.
