Central Board of Revenue is pleased to direct that the following further amendments shall be made in the Federal Excise Rules, 2005

GOVERNMENT OF PAKISTAN CENTRAL BOARD OF REVENUE (REVENUE DIVISION) *** Islamabad, the 1st August, 2006 NOTIFICATION (Federal Excise) S.R.O. 780(I)/2006.- In exercise of the powers conferred by section 40 of the Federal Excise Act, 2005, the Central Board of Revenue is pleased to direct that the following further amendments shall be made in the Federal Excise Rules, 2005, namely:- In the aforesaid Rules,- (a) in rule 2, in sub-rule (1), after clause (c), the following new clauses shall be added, namely:- “(ca) “aircraft operator” ‘includes any airline or person or company undertaking the carriage of passengers on an air journey within Pakistan or outside Pakistan from any airport or aerodrome located within the territory of Pakistan; (cb) “air ticket” means a ticket or electronic record on the basis of which a person is treated as being entitled to travel as a passenger on a particular flight or flights”; (b) for rule 41A, the following shall be substituted, namely:- “41A. Special procedure for collection of excise duty on services provided by aircraft operators in respect of travel by air of passengers within the territorial limits of Pakistan and travel by air of passengers embarking on international journey from Pakistan. (1) The provisions of these rules shall apply for collection and payment of excise duty by the aircrafts operators in respect of travel by air of passengers within the territorial jurisdiction of Pakistan and in respect of passengers embarking on international journey from Pakistan including chartered flights. The duty shall not be charged from Hajj passengers, transit passengers, supernumerary crew, diplomats and passengers having arrived in Pakistan from abroad on tickets issued outside Pakistan and are embarking only for return journey from Pakistan. (2) The Head Offices of the airlines and aircraft operators, if not already registered, shall apply to the Central Registration Office located at Central Board of Revenue for excise registration in the form, FE-1 under Rule 3 of the Federal Excise Rules, 2005. The foreign airlines shall have the option to obtain a single registration of an authorized office or separate registrations of branch offices. In case of single registration, the centralized office shall be responsible for the payment of excise duty in respect of all the branch offices. (3) For the purpose of levy of excise duty on travel by air of passengers within the territorial jurisdiction of Pakistan, the services provided by the aircraft operators shall represent the total charges received from the passengers excluding the amount of excise duty leviable thereon. (4) Where a passenger performs a domestic journey at concessional rate or without being charged any fare, the fare ordinarily payable for the journey shall, for the purposes of these rules, be deemed to have been paid by such passenger for the purpose of levy of excise duty. (5) Excise duty shall be leviable on international air travel originating from Pakistan as per rates specified by the Federal Government by notification in the official Gazette. (6) The excise duty shall be chargeable on all international air tickets issued directly by the airlines or through their agents for the international journey starting from any where in Pakistan, whether such tickets are issued in Pakistan or outside Pakistan. (7) An air ticket issued for international travel covering more than one destination on flights operated by two or more airlines shall be chargeable to excise duty by the airline issuing the ticket and shall be charged at the rate of excise duty applicable for the farther destination in terms of distance from Pakistan. 41-B Manner of collection and payment.- (1) The duty under these rules shall be charged and collected by the airline itself or through its authorized sales or travel agents at the time of issuance of tickets or at the time of chartering of flights. Provided if due to some unavoidable reasons the duty is not collected at the time of issuance of tickets the same shall be charged before the boarding of the passengers on the aircraft. (2) The duty due for each month shall be deposited by the airline by the 27th day of the following month in respect of the services provided upto the last working day of each calendar month. 41-C Penalty.- In case duty is not deposited by the airline by the due date, it shall, in addition to the payment of duty be liable to pay default surcharge at the rate of one per cent per month for the first six months and at the rate of one and half per cent per month thereafter and shall also be liable to penalty of ten thousand rupees on every such ticket on which the duty has not been collected under the Act or these rules. 41-D Passengers not to board the aircraft without payment of duty.- No airline or person-in-charge of aircraft shall allow any passenger to board the aircraft unless such passenger has paid the excise duty. 41-E Submission of passenger manifest.- The Collector of Sales Tax and Federal Excise having jurisdiction may require an aircraft operator to file a copy of the passengers manifest in such form and manner before such officer as may be specified by him, in respect of the flights carrying passenger on inland or international journey. 41-F Refund.- The duty charged on tickets which are subsequently cancelled or not utilized for travel shall be refundable to the passengers in the same manner as the fare is refunded. However no refund of excise duty shall be admissible on tickets which are partially utilized. 41-G Monthly return and records.- The airlines and aircraft operators shall file a monthly return electronically in the form FE-IV (d) under rule-47 by the 28st day of the month to the Collectorate in whose jurisdiction it is registered. The airlines shall maintain the records prescribed under section 17 of the Federal Excise Act, 2005 for a period of three years. Copies of all treasury challans or vouchers indicating the amounts deposited as duty shall also be preserved in the records by the airlines.” 41-H Input tax adjustment:- For the purpose of payment of excise duty chargeable on international air travel, no input tax adjustment shall be allowed to the airlines. The airlines shall deposit in the Government treasury, the entire amount of excise duty collected on international air travel without making any deductions”. [C.No.1/1-STB/2006] (Wajid Ali) Secretary (ST& FE Budget)