FED at the rate of 17 percent proposed on edible oils, ghee
KARACHI: The Federal Budget 2019-20 announced on Tuesday has proposed Federal Excise Duty (FED) at the rate of 17 percent on edible oil and ghee.
[the_ad id="32940"]Vegetable ghee and cooking oil are subject to FED only. Manufacturers only pay Rs1 per kg on value addition and Rs 40 per kg on value addition of edible oilseeds imported.
Collection of taxes is very less as compared to its actual potential: Rs. 466 million for their value addition and Rs 42 billion at import stage despite the fact that 27% of edible oil production is local.
It is proposed to increase rate of FED to 17% on edible oils / ghee / cooking oil and do away with Rs1/kg tax in lieu of value addition tax and do away with concessional rates on edible seeds. Ghee cooking / oil which is sold in retail packing under a brand name is proposed to be subject to sales tax at 17% of retail price.
It is proposed to restore normal FED regime in sales tax mode under which industry pays FED on actual value addition.