Is there any Federal Excise Duty and/or special excise duty in Pakistan Law?

Federal Excise duty formerly known as Central Excised Duty is Levied by the government of Pakistan as Federal Tax on the following: 

• Goods produced or manufactured in Pakistan
• Goods imported into Pakistan
• Such goods as the Federal Government may, by notification in the official Gazette, specify, as are produced or manufactured in the non-tariff areas and are brought to the tariff areas for sale or consumption therein
• Services provided or rendered in Pakistan

Special Excise Duty 

As part of budgetary measures for the year 2007-08, Special FED at 1% has been levied on goods which are manufactured or are imported in Pakistan. This duty is in addition to FED as prescribed in First Schedule of the Federal Excise Act, 2005. For list of goods excluded from purview of this special duty and other details see SRO 655(I)/2007.

 

 

FEDERAL EXCISE SALIENT FEATURES BUDGET 2009

Board Empowered

• · It is proposed that any due dates apart from generally prevailing ones shall be notified by

the Board instead of Federal government as previously done.

• · „ Exemption allowed to banks and NBFCs against certain services.

KIBOR – the new standard rate

• · KIBOR has been defined as new standard and the levy of default surcharge and the

amount to be paid on delayed refunds are proposed to be linked to KIBOR.

• · Rate of default surcharge is proposed to be KIBOR + 3 %.
• · Rate of amount payable for delayed refund changed to KIBOR per annum.

More records – More Fuss

• · Retention of record from 05 years is proposed to be extended until disposal of pending litigation

at any appellate forum.

Telecomm Sector – a mixed approach

• · Rate of FED on telecom services is reduced from 21% to 19% in order to reduce the cost of

the service.

• · SMS services attract levy of FED at 20 paisa per SMS.

FED on banking and stock brokers

• · Definition of services extended to include Banking and rate is also being enhanced from

10% to 16%. The collection and payment of such FED will be governed under VAT mode,

which means that input tax credit would now be adjustable against the output FED.

• · Stockbrokers are also brought to the tax net by levying FED at the rate of 16% of the

charges, which shall be payable in VAT mode.

• · Insurance services subjected to FED at enhanced rate of 16 percent thus making insurance

sector also prone to FED.

Port and terminal operators ‘exercised’

• · The services of port and terminal operators have also been subjected to levy of ED at the

rate of 16% of the charges, which shall also be collected and paid in VAT mode as banking.

However stevedoring service providers escape ED this time.

Tax Invoices – Broadening the Tax Net

• · National Tax Number or Computerized National Identity Card number to be included in invoices.

Cigarettes

• · Rates of FED was enhanced on Cigrattes

Rationalization of Appeals and ADRC

• · Procedures of admitting, hearing and disposing of appeals synchronized with other indirect

taxes.

• · FBR empowered to dissolve an ADRC and appointment of new Committee, in case of any

failure to make recommendations within the stipulated or extended period.

• · FBR required to give order on recommendation of ADRC within specified time.

Motor Cars, Staple Fibre, Umrah and certain banking services- Escape from the inevitable

• · Motor cars and other motor vehicles principally designed for the transport of persons including

station wagons and racing cars of cylinder capacity exceeding 850 cc.

• · Viscose staple fibre
• · Services provided or rendered by banking companies and non-banking financial companies

in respect of Hajj and Umrah, cheque book, insurance, Musharika and Modaraba financing

and utility bill collection.