Sales tax exempted on import of aircraft, ships
ISLAMABAD: The Federal Board of Revenue (FBR) has extended sales tax exemption on import or lease of aircrafts and its parts to all airline companies registered in Pakistan. According to the FBR’s instructions issued to the field formations on Monday, through addition of S. No. 181A, exemption on import or lease of aircraft and parts thereof has been extended to airline companies registered in…
The Federal Board of Revenue (FBR) has renewed sales tax exemption for the import and lease of aircraft and their components to all air travel companies registered in Pakistan. The extension, instructed on Monday, follows the addition of S. No. 181A, which expands the exemption to include these assets and components. Previously, the exemption for ships, which had been flying under the Pakistani flag, was withdrawn in 2021.
However, the FBR has now reinstated this exemption, along with the tax relief on plant, machinery, and other capital assets necessary for shipbuilding. Despite this, air tickets for club, business, and first-class classes remain subject to fixed federal excise duty, which can sometimes surpass the ticket's price itself. To address this issue, the FBR has reduced excise duties for international flights to North America, the Middle East, Europe, and Far East and Australia to Rs50,000, Rs25,000, Rs40,000, and Rs40,000 respectively.
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