The Civil Aviation Authority (CAA) has brought its Rs. 50 billion tax dispute with the Federal Board of Revenue (FBR) before the Supreme Court. This move follows the Sindh High Court’s suggestion to settle the issue through the Alternate Dispute Resolution Committee (ADRC) or the federal cabinet, which the CAA has rejected.

The Supreme Court is set to hear the case on Wednesday, while the FBR expects to receive Rs. 9.5 billion in advance income tax from the CAA by September 25, as reported by Express Tribune.

Read more: FBR Reports Rs113 Billion Shortfall in August Tax Revenue

The CAA contends that, as a regulatory body, it should be exempt from taxes as a state-owned entity, citing the Civil Aviation Act, 2023, and the Pakistan Airports Authority Act, 2023.

Conversely, the FBR argues that these exemptions do not override the Income Tax Ordinance, 2001, and that the CAA is obligated to settle its tax dues.

The FBR and Ministry of Finance are opposing the Ministry of Law’s support for the CAA’s tax exemption, adding pressure to the federal government’s financial commitments. Earlier this year, the FBR recovered Rs. 29 billion from the CAA.