Import of aircraft, parts: ST exemption solely for PIACL opposed
The Senate Committee on Finance opposed exclusive sales tax exemption for PIACL, advocating for all airlines to receive the benefit to prevent discrimination, despite its privatization context.
- Sales tax exemption for aircraft and parts imports.
- Preventing discrimination within the airline industry.
- PIACL's privatization process and IMF approval.
ISLAMABAD: The Senate Standing Committee on Finance on Sunday strongly opposed a proposal to grant sales tax exemption on the import of aircrafts and parts by only Pakistan International Airlines Corporation Limited (PIACL) and directed the government to include names of all airlines in the list of exemption to avoid discrimination.
The Senate Standing Committee on Finance Sunday reviewed the recommendations on the Finance Bill 2026-27 and completed clause by clause reading of amendments in the Sales Tax Act and Federal Excise Act.
The committee approved proposals on the digitisation of the Federal Board of Revenue (FBR) and FBR’s faceless Inland Revenue system.
Senator Saleem Mandviwala, Chairman of the committee strictly directed the Finance Minister, Tax Policy Unit and the Federal Board of Revenue (FBR) to avoid discrimination within the airlines industry. “This is total discrimination which cannot be allowed. The whole aviation industry should benefit from this tax relief,” he said.
He stated there would be litigation, and other airlines will go to court. Therefore, the government must include all other airlines into the Exemption Schedule of the Sales Tax Act.
Responding to this, Finance Minister Muhammad Aurangzeb stated that the exemption has been given within the context of privatisation of the PIACL. This is part of the privatisation process to give sales tax exemption to the new aircrafts being imported by the said airline, he added.
Finance Minister stated that the government has to take approval of the International Monetary Fund (IMF) for including names of all airlines in the sales tax exemption schedule.
The committee agreed with the recommendation and amended the proposal to extend the exemption framework beyond PIACL to all eligible airlines.
Finance Committee approved import of bullet proof vehicles for the Shanghai Cooperation Organisation (SCO) Summit, but asked details of number/ type of vehicles required for dealing with the threat of terrorism against government functionaries.
The committee approved expansion of Third Schedule of the Sales Tax Act by adding new items on which tax would be charged on the basis of printed retail price.
The committee also approved amendments relating to the auction of seized goods. Under the revised framework, e-auctions will be permitted.
Copyright Business Recorder, 2026
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