Caffeinated energy drinks are health hazard; FED enhanced to 25pc

ISLAMABAD: The federal government has increased federal excise duty from 13 percent to 25 percent on consumption o f caffeinated energy drinks on both local supplies and import of such drinks.

Hammad Azhar, Federal Minister for Industry and Production, while presenting the federal budget 2020/2021 on June 12 on floor of the house said that caffeinated energy drinks are health hazard, hence to reduce the consumption of such drinks it is proposed that the FED may be increased from 13 percent to 25 percent both at import and at local supply.

It may be noted that aerated waters are already subject to FED at 13 percent.

Further, FED on imported cigarettes, cheroots, cigarillos, cigars and other tobacco substitutes is being enhanced from 65 percent to 100 percent in line with WHO (World Health Organization) standards.

Necessary changes are also proposed to be made in Table 1 of the First Schedule pertaining to aforesaid items to cover for tobacco substitutes as well as E-cigarettes, the minister said.

Filter rod is a basic input material for cigarette manufacturing. Present rate of FED is Rs.0.75 per filter rod. To enhance the effect of monitoring and enforcement on tobacco consumption and tax management, it is proposed that the existing rate be enhanced to Rs.1 per filter rod.

FED structure is already in place for both local and imported motor cars and SUVs excluding auto rickshaw falling under the PCT heading 87.03.

Double cabin pick up which is currently classified as goods transport vehicle is being reclassified as passenger transport vehicle, which will bring it in the ambit of FED at 7.5 percent ad valorem in case of locally manufactured vehicles and at 25 percent in the case of imported ones.

Sales tax is charged on standard rate of 17 percent on import and local supply of Potassium Chlorate and in addition to that Rs 70 per kg is also collected. On the recommendation of the Match manufacturers association the rate of Rs. 70 per kg is being enhanced to Rs. 80 per kg. Provided that rate of rupees 70/80 per kilogram is not applicable on imports made by and supplies made to organizations under the control of Ministry of Defense Production.

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