Government waives sales tax on PIA aircraft, parts, and ground equipment to lift national carrier
In a major regulatory move to ease the financial burden on the national flag carrier, the government has officially granted a sales tax exemption on the import and leasing of aircraft by Pakistan International Airlines Corporation Limited (PIACL) through the Finance Bill, 2026.
The tax relief aims to streamline PIACL’s operational costs, helping the airline modernize its fleet and maintain its aircraft with fewer fiscal hurdles.
Key Amendments in the Sixth Schedule
The exemption has been formalized through strategic amendments in the Sixth Schedule of the Sales Tax Act, 1990. The scope of the tax waiver extends beyond the actual aircraft to encompass critical maintenance and operational hardware.
According to the bill, the exemption applies to:
• Aircraft Fleet: The direct import or lease of aircraft by PIACL.
• Spare Parts & Maintenance: Essential aircraft parts and maintenance materials.
• Ground Handling Hardware: Ground handling equipment, service and operation vehicles, catering equipment, and specialized fuel trucks.
Strict Oversight and Operational Conditions
To prevent misuse of the tax-free imports, the Finance Bill has attached stringent compliance conditions that custom authorities must strictly enforce:
• Quantity Controls: Customs authorities are mandated to verify that the quantities of imported parts and materials are strictly limited to the actual operational and maintenance requirements of PIACL’s fleet.
• Locally Manufactured Exception: Ground equipment, catering assets, and fuel trucks are only eligible for the exemption if they are not manufactured locally.
• Airport Boundaries: The law explicitly dictates that all tax-exempted ground handling and operational vehicles must be used strictly within airport premises.
