Islamabad, Sep 17: The Civil Aviation Authority (CAA) has filed a case in the Supreme Court against the Federal Board of Revenue (FBR) over a tax issue worth Rs. 50 billion. This comes after the CAA rejected the advice of the Sindh High Court to settle the matter with the federal government or the Alternate matter Resolution Committee (ADRC).
According to Express Tribune, the Supreme Court is set to hear the matter on Wednesday, right before the FBR expects to receive Rs. 9.5 billion in advance income tax from the CAA on September 25.
According to CAA, it shouldn’t be taxed as a state-owned company because it is a regulator. For discussion on the subject, it highlighted exemptions under the Pakistan Airports Authority Act of 2023 and the Civil Aviation Act of 2023. On the other hand, FBR insists that the CAA must pay all taxes due and that these exclusions do not supersede the Income Tax Ordinance, 2001.
The Ministry of Law’s backing of CAA’s tax exemption is being contested by FBR and the Ministry of Finance, and the legal dispute is probably making it more difficult for the federal government to fulfill its financial obligations. It is important to note that FBR obtained Rs. 29 billion from the Civil Aviation Authority earlier this year.
