FBR explains federal excise duty on edible oils

ISLAMABAD: Federal Board of Revenue (FBR) has issued explanation to implementation of federal excise duty on edible oils.

The FBR issued change in regime of FED on ghee and cooking / edible oils introduced through Finance Act, 2019 and applicable from July 01, 2019:

FED on ghee and edible oils was payable at 16 percent in sales tax mode. However, payment of Re 1 / kg on input oils spared the manufacturers of any further payment against value addition.

In case of input seeds, payment of Rs. 40 per kg discharged the manufacturer’s liability on value addition.

In case of solvent extraction units, need to apportion input taxes was also done away with. This regime has been abolished.

SRO 24(I)/2006 dated 07.01.2006, SRO 507(I)/2013 dated 12.06.2013, SRO 508(I)/2013 dated 12.06.2013, and SRO 68(I)/2006 dated 28.01.2006 have been rescinded.

FED of Rs. 0.40 per kg of oilseeds, as at Serial number 54 of First Schedule has also been withdrawn by omitting this serial.

Other salient features of the change are:

(i) The rate of FED on ghee and cooking / edible oils has been enhanced to 17 percent.

(ii) In case of products in retail packing FED shall be payable on the basis of retail price.

(iii) The refund on export of these items, as made on or after 1st July, 2019, shall be paid on the basis of actual excess of input tax under the Sales Tax Rules, 2006 and not the basis of fixed rate notification.

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