FBR Expands Tax Relief For Airlines, Ships And Shipbuilders

The Federal Board of Revenue (FBR) has widened the sales tax exemption available on the import or leasing of aircraft and aircraft components, extending the facility to all airlines registered in Pakistan. The development was communicated to relevant field formations through official instructions.

The expanded relief has been introduced through the addition of Serial No. 181A, which specifically covers aircraft and aircraft parts imported or leased by locally registered airline companies.

The FBR has also reinstated the sales tax exemption for ships operating under the Pakistani flag. This facility had been withdrawn in 2021.

In addition, imports of plant, machinery and other capital equipment intended for shipbuilding activities have also been brought under the sales tax exemption.

Separately, the tax authority has revised and rationalised federal excise duty (FED) on club-class, business-class and first-class air tickets. These tickets were previously subject to fixed duties that, in certain cases, could even exceed the actual ticket price.

Under the updated structure, the FED has been fixed at Rs50,000 per ticket for travel to North America, Rs25,000 for the Middle East, Rs40,000 for Europe, and Rs40,000 for the Far East and Australia, according to the FBR.