KARACHI: Sindh High Court (SHC) on Thursday ordered Federal Board of Revenue (FBR) to release two impounded planes that has been acquired by Pakistan International Airlines (PIA) on wet lease, if it furnishes bank guarantee equal to the amount claimed by FBR.
Justice Munib Akhtar who headed the single bench of SHC issued this order on a lawsuit filed by PIA against FBR that has impounded two aircraft over non-payment of sales tax.
The Court directed PIA to furnish bank guarantee equal to the amount claimed by FBR for clearance of planes to the satisfaction of Nazir of the court, who later shall issue appropriate certificate for release of aircrafts.
Plaintiff through its attorney Asim Rauf submitted PIA entered into aircraft lease agreement with Travel Services KFT on March 21, 2014 and acquired two A-230 aircraft on wet lease.
PIA filed goods declaration of two planes on March 28, 2014 with FBR. PIA was informed FBR was going to levy the sales tax on the two aircraft, which were leased out to PIA.
He said no sales tax was payable in respect of Section 3(1)(b) of the Sales Tax Act 1990, since the sales tax was payable only on the sale of goods and here aircraft had been acquired on lease.
He said since the lease agreement had been in operation, rent was payable for two planes on daily basis.
If aircraft were not made operational, PIA would have to incur losses for the days in which aircraft was not used for commercial travel.
He said air aircraft were urgently needed to alleviate the operation difficulties being faced by national carrier.
He requested the Court to declare the act of FBR impounding planes, acquired by PIA on lease, illegal and direct it to release the aircraft impounded by it.
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