MARKET DEVELOPMENT
FED on Edible Oil Likely to Be Doubled
FED on Edible Oil Likely to Be Doubled
28/04/2015 (Business Recorder) - The Federal Board of Revenue (FBR) is likely to enhance the fixed rate of Federal Excise Duty (FED) in value addition mode on import of edible oil from existing Rs 1 per kg to Rs 2 per kg or Rs 2,000 per metric ton (PMT) to generate additional revenue in 2014-15.
It is learnt on Monday that vide SRO.24(I)/2006 dated 7th Jan, 2006 in value addition mode@ Rs 1/kg was levied on edible oils bearing HS Codes 15.07, 15.08, 15.09, 15.10, 15.11, 15.12, 15.13, 15.14, 15.15, 1516.2010, 1516.2020, 15.17, 15.18 as well as vegetable ghee and cooking oil. The amount of Rs 1 per kg is a final discharge of liability and no input adjustment of sales tax/FED is admissible against manufacturing of vegetable ghee and cooking oil as explained in Federal Excise General Order (FEGO) No.1 dated 19th Jan, 2006.
The federal excise duty (FED) in value addition mode is collected at import stage in lieu of its applicability at production stage. This is over and above sales tax in FED mode @ 16 percent vide Section 3 of Federal Excise Act, 2005.
Sources said that the FBR is considering upward revision of fixed rate of value addition from existing Rs 1/kg to may be up to Rs 2/kg or Rs 2000/M. Ton on import of edible oil. This measure is likely to increase revenue generation by over Rs 2 billion per annum, since import of edible oil mainly palm oil calendar year 2014 stood at 2.289 million ton.
Keeping in view the 42 percent of oil content in imported Canola and Sunflower, oil seeds, the FED in value addition @ Rs 400/M. Ton of imported oil seed was levied vide S.R.O 508(I)/2013 dated 12th June, 2013.
It is learnt on Monday that vide SRO.24(I)/2006 dated 7th Jan, 2006 in value addition mode@ Rs 1/kg was levied on edible oils bearing HS Codes 15.07, 15.08, 15.09, 15.10, 15.11, 15.12, 15.13, 15.14, 15.15, 1516.2010, 1516.2020, 15.17, 15.18 as well as vegetable ghee and cooking oil. The amount of Rs 1 per kg is a final discharge of liability and no input adjustment of sales tax/FED is admissible against manufacturing of vegetable ghee and cooking oil as explained in Federal Excise General Order (FEGO) No.1 dated 19th Jan, 2006.
The federal excise duty (FED) in value addition mode is collected at import stage in lieu of its applicability at production stage. This is over and above sales tax in FED mode @ 16 percent vide Section 3 of Federal Excise Act, 2005.
Sources said that the FBR is considering upward revision of fixed rate of value addition from existing Rs 1/kg to may be up to Rs 2/kg or Rs 2000/M. Ton on import of edible oil. This measure is likely to increase revenue generation by over Rs 2 billion per annum, since import of edible oil mainly palm oil calendar year 2014 stood at 2.289 million ton.
Keeping in view the 42 percent of oil content in imported Canola and Sunflower, oil seeds, the FED in value addition @ Rs 400/M. Ton of imported oil seed was levied vide S.R.O 508(I)/2013 dated 12th June, 2013.