Vague rules: FBR unable to collect FED on chartered flights

The Federal Board of Revenue (FBR) is reportedly unable to collect proper Federal Excise Duty (FED) on chartered flights, due to ambiguity in prescribed rules; it is learnt here on Monday. According to sources, field formation despite having directives to collect FED on chartered flights by the FBR remained unable to make it possible, due to ambiguity in Table-II of the First Schedule to the Federal Excise Act, 2005.
In Table-II of the First Schedule, the FBR has imposed 16 percent FED and Rs 25 on the services provided or rendered in respect of travel by air of passenger within the territorial jurisdiction of Pakistan while services rendered for international journey to or from Pakistan has cash slabs for different classes with standard rate of 16 percent FED.
Sources said that cash slabs were causing to create problems for field formation to collect proper FED on chartered flights. Keeping this problem in view, the board has now made it clear that FED on chartered flights shall be charged at 16 percent of the total charges. They further said that all concerned tax offices had also been directed to co-ordinate with the Civil Aviation Authority (CAA) to ensure that FED on chartered flights was properly charged and paid.