Public sector universities required to obtain NTNs

The public sector universities/educational institutions, having Free Tax Numbers (FTNs) and claiming exemption, must obtain National Tax Numbers (NTNs) and file returns, as only government departments and embassies are entitled to register with the Federal Board of Revenue (FBR) under the category of FTNs.
Sources told Business Recorder here on Saturday that the federal government, provincial governments and local governments are entitled to obtain FTNs. If any public sector university has obtained FTN on the assumption that it is a government department, it is wrong. Public sector universities are required to obtain NTNs and duly file their returns despite the fact they are claiming exemption.
For example, independent power producers are exempt from tax but they are filing their returns. "Public sector universities are not government and they have to obtain NTN. The holder of FTN is not required to file returns, but the public sector universities have to obtain NTN and file their returns," an official explained.
Meanwhile, Regional Tax Office Islamabad has asked FBR to explain the application of section 113/113C read with clause (126) of part-I of the 2nd Schedule to the Income Tax Ordinance. The RTO has further requested the FBR for clarification/guidance.
The RTO said that the educational sector is one of the important sectors falling in the jurisdiction of RTOs Zone. As many as 126 cases of educational institutions exist in the zone, which are managed by companies, trusts and NPOs etc. Not all cases have been granted status of NPO u/s 2936 of the Income Tax Ordinance 2001. A common issue arising in most of the cases of educational institutions (other than private limited companies) is that they are claiming exemption under clause (126) of Part I to the Income Tax Ordinance 2001 and have also obtained free tax number. Exemption being claimed by a private limited university under clause (126) of the 2nd schedule to the Income Tax Ordinance has been denied.
In case of public sector universities legal issues are being faced by the RTOs. Clause (126) of part I and the 2nd Schedule to the Ordinance exempts income of a public sector university. However section 113 of the Ordinance qualifies the exemption and requires payment of tax on turnover irrespective of the fact that the income is exempt under any provision of the Ordinance. The Clause (11A) of Part IV of the 2nd schedule exempts specified persons from operation of section 113.
The RTO is confronted with following legal issues which require FBR's guidance:
Firstly, whether is a public sector university claiming exemption under clause (126) of 2nd schedule to the Ordinance liable to pay turnover tax u/s 113 of the Ordinance?
Secondly, whether can FTN issued in light of Boards' directions vide E.No.4(435) jurisdiction/2015/415-R dated 11.01.2016 be used for the purposes of filing of income tax returns and be construed as grant of exemption from total income?
Thirdly, for the purposes of determining an establishment as federal government/provincial government or its subordinate office, does the said establishment necessarily be specified in the Rules of Business as an attached department?
Fourthly, whether in terms of sub section (4) of Section 49 of the Ordinance, can a company, a trust, an authority or any other institution run by the federal or provincial government be regarded as a government department exempt from payment of all taxes?