Private TV channels owe Rs7-8bn to FBR? -Pakistan Press Foundation (PPF)

Paksitan Press Foundtion

Private TV channels owe Rs7-8bn to FBR?

ISLAMABAD: Regional Tax Office (RTO), Karachi has raised a demand of Rs 7 to 8 billion against certain private television channels (Aaj News not included) for non-payment of sales tax on advertisements for the period 2006-2009.

A senior FBR official told Business Recorder on Tuesday that many private television channels have not deposited the deducted sales tax on advertisements during the period under review.

Many channels falling within the jurisdiction of RTO Karachi have not made payment of sales tax. The headquarters of most of the private channels are located in Karachi and their tax matters are handled by the RTO Karachi.

They have collected the Sales Tax amount from the advertisers, but did not deposit the same in the national exchequer. The demand of Rs 7 to 8 billion included principal amount of sales tax, default surcharge and penalties as specified in the Sales Tax Act, 1990. The accumulated amount comes to around Rs 7 to 8 billion, which is yet to be paid by private television channels.

The RTO Karachi has completed the legal process by issuing show cause notices and subsequently passed orders for the collection of principal amount of sales tax, default surcharge and penalties.

This tax demand has nothing to do with the income tax liability relating to the private TV channels. Under the law applicable from 2006-2009, it was the responsibility of the TV channels to collect sales tax on advertisements aired by them and deposit the same in the national exchequer. However, the collected amount has not been deposited for which now the FBR has taken an action admissible under the law.
Source: Business Recorder
Date:3/10/2010