KARACHI: The Federal Board of Revenue has advised the field formations to ensure that the revised regime of Federal Excise Duty (FED) is properly implemented and the duty is charged on the revised rates.

The specific rates of FED on cigarettes have been increased and LTUs/RTOs are advised to ensure that FED is charged at revised rates from cigarettes manufacturers.

In order to increase the cost of non-compliant manufacturers of cigarettes, and as an attempt to reduce the extent of evasion in this sector, FED has been levied at Rs.0.75 per filter rod through amendment in the First Schedule to the Federal Excise Act, 2005. It may also be added that the supply of filter rods to unregistered persons is already barred under SRO 61 (l)/2010.

LTUs/RTOs where manufacturers of filter rods are located to ensure that FED is properly charged and take necessary action in case the same are supplied to unregistered persons.

Customs Collectorates need to ensure that the levy is properly enforced through the “add levy” functionality at the assessment stage, for the reason that this levy could not be fed in WeBOC as it is not UOM based.

The rate of FED on aerated waters has been increased from 9 percent to 10.5 percent through amendment in the First Schedule to the Federal Excise Act, 2005. Customs Collectorates and LTUs/RTOs where manufacturers of aerated waters are located to ensure that FED is charged at new rates.

Field formations are advised to keep an eye on input tax adjustments in the monthly sales tax returns because now generally each manufacturer of aerated water will pay net FED after adjusting input FED suffered on concentrate.

Aviation industry has been given fiscal incentives in the Budget. In order to compensate for the revenue loss from these incentives, FED on domestic air travel has been made non-adjustable by deleting the entry in SRO 550(l)/2006. LTUs/RTOs where airlines are assessed to ensure that no adjustment of sales tax is made against FED on domestic air travel. For this purpose, monthly analysis of airlines’ returns needs to be done.