Large Taxpayers Unit (LTU), Karachi, has frozen nine bank accounts of Pakistan International Airline (PIA) to recover Federal Excise Duty (FED) amounting to Rs 1.6 billion; it was learnt here on Friday. The action was taken under Rule 60 of FED Rules 2005. The national flag carrier, which collects Rs 10000 and Rs 5000 from international passengers of business and economy classes, respectively, is required to deposit the collected amount on a monthly basis.
However, the airline remains unable to pay Rs 1.6 billion, which is a fresh recovery and pending for three months (March, April & May), sources told Business Recorder here on Friday. They said that the PIA despite having directives from Economic Co-ordination Committee (ECC) of Cabinet to ensure FED payment on time was dilly-dallying to perform its statutory liability.
They said that LTU Karachi had not only raised tax demand of Rs 1.6 billion for said period but also issued show cause notice to the airline in August; however the national flag carrier had neither made payment nor responded to the tax office. Resultantly, the LTU, Karachi on Friday froze its nine accounts to recover the said amount, sources said. Sources further said that although airline had been directed to maintain a separate account for FED collection, it was not being done as a cash-starved PIA was reportedly using FED to meet its running expenditures. When contacted, PIA spokesman Aamir Memon dispelled the impression that FBR had seized airline's bank accounts, saying that negotiations with taxation authority were under way. He argued: "PIA is an international airline and operating from 34 countries hence it is intricate to ensure uninterrupted FED payments".
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