ISLAMABAD - The Federal Board of Revenue (FBR) on Monday asked the airlines to collect advance tax from passengers at the time of issuing air tickets, either these are issued manually or electronically.
The four percent advance tax on the air-tickets would be applicable if the journey originates from Pakistan. The airlines issuing tickets for the uplifting passengers of any airline, whether its head office or registered office or agent in Pakistan or not, if the journey originates from Pakistan, stated a notification issued by FBR. It added that the obligation to charge, collect and deposit tax is in respect of the airlines uplifting the passengers in respect of the journey originating in Pakistan.
Meanwhile, where the tickets are issued by persons, other than the airlines, and the person issuing tickets on the behalf of the airlines, are charging and collecting advance tax from the passengers and making payment of tax to the airlines directly, or through any other entity authorised in that behalf, the tax so collected by the airlines from such person shall be paid.
The notification further stated that tax collected by the airlines should be paid by the 15th day of the following second month in respect of the tickets issued up to the last working day of each calendar month. It clarifies that provided for the month of May and June; the tax shall be paid on 15th day of June on the basis of average tax paid in respect of July to April. Any short of excess tax paid, in respect of tickets issued during May and June, shall be adjusted in the tax required to be paid by the 15th of July.
Meanwhile, every airline issuing international air tickets shall make adequate arrangements for collection of the tax under this rule from the persons issuing tickets on its behalf or through electronic means, and in case of default, the said tax shall be collected from the airlines, without prejudice to any other liability, which it may incur under the ordinance.
The FBR also directed the airlines that notwithstanding anything contained in second scheduled to the Income Tax Rules 2002, monthly and annual statements of the tax collected under section 236B and 236L, shall be submitted by every airline to the respective Commissioner Inland Revenue.
It is worth mentioning here that incumbent government had imposed four percent advance tax on the purchase of air-tickets. The FBR had already issued a notification to implement the decision in July 2014, but on Monday, the tax department has issued an amended notification, which made some changes in previous notification.