Federal officials plan to recoup Federal Education Department (FED) debts from Pakistan International Airlines (PIA) following the airline's sale.

Federal officials plan to recoup Federal Education Department (FED) debts from Pakistan International Airlines (PIA) following the airline's sale.

The Federal Board of Revenue (FBR) has announced that it plans to recover approximately Rs 920 million in outstanding Federal Excise Duty (FED) from Pakistan International Airlines (PIA) following the completion of the airline's privatization process.

The decision to recover the FED was triggered by audit objections raised by the Auditor General of Pakistan (AGP), who pointed out that the FED was collected from consumers and is not a government grant to PIA. As such, it must be remitted to the national treasury.

However, FBR officials, including Dr. Hamid Ateeq Sarwar, have expressed concern that recovering this amount before privatization could lead to PIA ceasing operations. Therefore, the recovery of FED from PIA has been deferred until after the privatization process, with updates on the status of the privatization awaited from the Privatization Commission.

Meanwhile, the FBR is seeking the opinion of the Law Division regarding the SRO 706 (I)/2010 tractor tax refund issue. The matter is currently under deliberation, with no final resolution announced as of the latest reports.

The SRO 706 (I)/2010 tractor tax refund issue has been pending for the last 10-15 years, and the FBR's decision to seek legal opinion indicates ongoing efforts to address systemic tax recovery and management challenges within the FBR. These challenges include unrecovered FED and sales tax amounts, as well as difficulties in enforcement actions, which have contributed to issues like the delayed recovery from PIA.

In summary, the FBR will recover the outstanding amount of FED from PIA after its privatization, and is seeking legal opinion on the SRO 706 (I)/2010 tractor tax refund issue. The recovery of FED is necessary, as it was collected from consumers and not a government grant to PIA, and will be pursued post-privatization to avoid operational disruption. The privatization process status is key to timing the recovery, and updates on the process are awaited from the Privatization Commission.

1. The Auditor General of Pakistan (AGP) has emphasized that the Federal Board of Revenue (FBR) must remit the Federal Excise Duty (FED) collected from consumers to the national treasury, as it is not a government grant to Pakistan International Airlines (PIA).
2. A deferred recovery of FED from Pakistan International Airlines (PIA) will occur after the completion of its privatization process, as FBR officials are concerned that recovering the amount beforehand could cause the airline to cease operations.

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