INQUIRY AGAINST ILLEGAL CHARGES ON ACCOUNT OF FED BY INTERNATIONAL AIRLINES

Federal Board of Revenue (FBR) had enhanced Federal Excise Duty (FED) from Rs. 10,000 to 50,000 to be charged and collected on Club, Business and first class international air tickets effective 1st July 2022 under Section 3 of Federal Excise Act, 2005 . As per clarification by FBR, Rule 41A of Federal Excise Rules, 2005 stipulates that enhanced FED is chargeable on the Club, Business and first class air tickets at the time of issuance of air ticket. Thus, enhanced rate of FED on air tickets under Finance Bill, 2022 will be chargeable only on international tickets (club, business & first class) issued on first day of July, 2022. It was noticed that some foreign air lines had charged the FED at enhanced rate from the passengers who had purchased air tickets before 1st July 2022. The Prime Minister  took serious view of this malpractice being violative of instructions issued by FBR and was accordingly been pleased to direct that PMIC shall conduct an inquiry into the matter.

2.                     Chairman, PMIC was pleased to nominate Mr. Mohammad Naeem Jan Khan, Member, PMIC to carry out this task. It was found that 10 airlines had committed the violation and charged excess amount from 347 passengers on account of FED in respect of ticket purchased prior to 1st July, 2022. Accordingly, inquiry report was submitted to the PMO.

3.                     Subsequent to a meeting of Chairman, PMIC with the Honourable Prime Minister, it was decided that all concerned airlines should refund the amount of excess FED charged i-e Rs. 40,000/- each to 347 passengers. As of today, 05 airlines have fully refunded the amount of excess FED charged, and all others are doing. PMIC will continue to strive for ensuring the orders of Honourable Prime Minister for the good of the public at large.