Islamabad, June 10, 2025 – The Federal Board of Revenue (FBR) has released a summary of significant changes to the Federal Excise Act, 2005, introduced through the Finance Bill 2025. These amendments are part of broader fiscal reforms aimed at improving tax compliance, curbing tax evasion, and streamlining enforcement mechanisms.
Outlined below are the major features of the revised excise framework presented in the Finance Bill:
1. Seizure and Confiscation of Counterfeit Excise Goods
To strengthen enforcement and deter the illegal trade of excise goods, such as counterfeit cigarettes, beverages, and other dutiable items, the Finance Bill 2025 proposes that any such goods found without genuine tax stamps, banderols, stickers, labels, or barcodes will be liable for immediate seizure. Additionally, the vehicles or conveyance used to transport such items will also be seized. In severe violations, the goods may be subject to outright confiscation to discourage smuggling and non-compliance.
2. Revised Appeals Mechanism
The appeals process under the Federal Excise Act is being simplified. The pecuniary jurisdiction of the Commissioner (Appeals) has been abolished, giving taxpayers the flexibility to directly approach the Appellate Tribunal Inland Revenue. This aims to accelerate dispute resolution and reduce bureaucratic layers, as introduced in the Finance Bill.
3. Withdrawal of Duty on Property Transfers
As a relief measure, the excise duty previously imposed on the allotment and transfer of residential and commercial properties—through the Finance Act 2024—is now proposed to be withdrawn. This move is likely to stimulate activity in the real estate sector.
4. Expanded Enforcement Powers
The Finance Bill 2025 empowers the FBR to authorize officers from other federal or provincial departments to take enforcement actions under the Federal Excise Act. This includes authority under Section 26 (seizure) and Section 27(1) (confiscation), ensuring broader inter-agency coordination in tracking and regulating excise goods.
Overall, the Finance Bill aims to strengthen enforcement, provide relief where necessary, and modernize the excise duty framework for better compliance and transparency.