ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday explained the increased rate of Federal Excise Duty (FED) applied through Finance Supplementary Act, 2023.
The FBR issued Circular No. 01 of 2023 dated February 28, 2023 to explain the amendments to tax laws brought through Finance Supplementary Act, 2023.
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The revenue body said that the rate of federal excise duty on all types of aerated water has been increased from 13 per cent to 20 per cent and 10 per cent FED has been imposed on sugary fruit juices, syrups and squashes, waters whether or not containing added sugar or artificial sweeteners excluding mineral and aerated water.
The rate of federal excise duty under S. No. 9 and 10 of Table-1 of the First Schedule to the FEA has been increased through Finance (Supplementary) Act, 2023. The threshold of minimum price has also been enhanced by means of amendment in “Restriction-3-Minimum Price”.
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Furthermore, in order to secure revenue and ensure that no cigarette brands become liable to lesser FED as a result of changes in the price threshold, a new condition “Rate of Duty” has been added after the Table-1 in First Schedule to FEA.
The rate of FED on cement was Rs. 2/kg which was reduced to Rs. 1.50/k as part of the relief measure in the wake of Covid-19 pandemic through Finance Act, 2020. In order to bring at par with the rate prevailing prior to lst July, 2020, the rate of FED on cement has been increased to Rs. 2/kg.
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A fixed IATA region-wise FED has been imposed on international air travel in club, business and first class. It is pertinent to point out that there is no change in FED on international air travel in economy class and domestic air travel.
It is worth highlighting that the new rate of FED is only applicable in respect of air tickets issued on or after the date of commencement of Finance (Supplementary) Act, 2023.
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