FBR cancels tax exemptions to ARY Communications

 JournalismPakistan.com |  Published: 21 June 2015

The Federal Board of Revenue has cancelled tax exemptions for ARY Communications over allegations of misleading revenue details. A tax certificate was deemed illegal and void.

Summary

ISLAMABAD: The Federal Board of Revenue has cancelled all tax exemptions to ARY Communications for allegedly forging details of its revenues and providing incorrect information to them. In a letter issued on June 12, the FBR says that a tax exemption certificate issued to ARY Communications is “hereby declared to be ab initio illegal, void and of no legal effect, and is withdrawn ab initio. All responsibility arising from the use/misuse of the said certificate rests solely upon the taxpayer.” Fasadi.pk published a copy of the letter on its website as well besides elaborating the issue in detail. “The payments made by M/S ARY Communications (PVT) Ltd. to M/S ARY Digital Networks FZ LLC are not business profits but payments for purchase of airtime. Thus, they are not covered under Article 7 of the Convention but at the most, could be considered as technical fees within the meaning of Article 13(3) of the Convention. The subject certificate has therefore been issued on incorrect basis,” reads the letter posted on fasadi.pk. The website says the amount of money transferred by ARY Communications was Rs10billion while the tax deductible from the amount was around Rs2 billion.