The government has revised the Federal Excise Duty (FED) on business-class and first-class air tickets, with new fixed rates announced for passengers travelling to different international destinations.
Under the revised rates, passengers travelling to North America will pay Rs50,000 in FED per ticket, while the tax on air tickets to the Middle East has been fixed at Rs25,000 per ticket.
For travel to Europe, the FED has been set at Rs40,000 per ticket. The same Rs40,000 duty will apply to air tickets from Karachi to the Far East and Australia.
The revised rates mean the FED will form a fixed part of the cost of business and first-class international air tickets. However, the change does not necessarily mean that the overall airfare has been reduced, as ticket prices also include the airline’s base fare and other charges.
Meanwhile, the Federal Board of Revenue (FBR) has also restored and extended sales tax exemptions for the aviation and shipping sectors.
Registered airlines will receive sales tax exemption on the import of aircraft and spare parts. The exemption on aircraft purchased or leased by registered airlines has also been restored.
Sales tax exemption has also been restored on the import of ships, while tax relief has been provided on the import of plant, machinery and capital assets used for shipbuilding.
The FBR has issued instructions to its field formations regarding the revised sales tax exemptions.
