The Civil Aviation Authority (CAA) has taken its Rs. 50 billion tax dispute with the Federal Board of Revenue (FBR) to the Supreme Court. The conflict began after the Sindh High Court suggested that both parties resolve the issue through the Alternate Dispute Resolution Committee (ADRC).
However, the CAA rejected this idea, insisting that, as a regulatory body, it should be exempt from paying taxes under the Civil Aviation Act, 2023.
The FBR disagrees with this claim, arguing that the tax exemptions mentioned in the Civil Aviation Act do not take precedence over the Income Tax Ordinance, 2001.
This dispute will now be heard by the Supreme Court, with a final decision pending. In the meantime, the FBR is expecting an advance payment of Rs. 9.5 billion in taxes from the CAA by September 25.
This case highlights a significant legal battle between the two entities, with both sides standing firm in their interpretations of tax laws. The outcome could set a major precedent for how regulatory bodies are taxed in the future.
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