950821

8pc tax not

leviable on

non-resident

ship cos

MUZAFFAR QURESHI

KARACHI: The Central Board of Revenue has exempted non-resident shipping companies bringing import cargo from 8 percent income tax.

In a clarification addressed to the lawyers of Tristar Shipping Lines, which had challenged the income tax on inward cargo in the High Court, the Second Secretary, International Taxes, Rakhshanda Aziz, says that payments made to non-resident shipping companies bringing inward cargo do not attract the provisions of Section 80 of the Income Tax Ordinance.

Replying to the letter of Mahmood A. Hashmey Advocate, the CBR Second Secretary said that the provisions of Section 80 of the Income Tax Ordinance 1979 apply to the Pakistan source income of non-resident shipping companies, which inter alia means that the payments made in respect of outward carriage of passengers, cargo, animals etc. are subject to income tax equivalent to 8 percent of such payments.

It may be pointed out that the Income Tax Department in a bid to mop up more revenue before the close of financial year 1994-95 had sent notices to Tristar Shipping Lines and PNSC to pay 8 percent income tax on cargo of wheat and iron ore etc brought into the country by ships hired by them. The notices warned that if the tax was not paid the foreign ships will not be issued the port clearance.