ISLAMABAD: The Federal Board of Revenue (FBR) issued new rules on Monday for deduction of advance tax on air tickets.

A notification issued here by the FBR said that airlines issuing tickets directly to passengers, either manually or electronically, should charge and collect advance tax at the rate of 4 per cent and this should be paid within the prescribed time.

Explaining further, the obligation to charge, collect and deposit tax was in respect of the airline uplifting the passengers in respect of journey originating in Pakistan.

“And in the case, where the tickets are issued by persons, other than the airlines, and the persons issuing tickets on behalf of the airlines, are charging and collecting advance tax from the passengers and making payment of tax to the airlines directly, or through IATA, or through any other authorised in that behalf, the tax so collected by the airline from such persons shall be paid,” the notification said.

Moreover, the tax collected by the airlines shall be paid by the 15th day of the following second month in respect of tickets issued up to the last working day of each calendar month.

Provided that for the month of May and June, the tax shall be paid by 15th of June on the basis of average tax paid in respect of July to April.

Any short or 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 day of July.

According to the notification, every airline issuing international air tickets shall make adequate arrangements for collection of tax 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 airline, without prejudice to any other liability.

The airline will submit monthly and annual statements of tax collected to the respective commissioner inland revenue. Monthly statement for the month of September 2014 should be furnished along with the monthly statement of October 2014.

Published in Dawn, September 16th, 2014