LAHORE: Federal Board of Revenue has proposed imposition of special excise duty (SED) on the import and local manufacturing of goods alike in the upcoming budget.
In Fiscal Year 2007-08, FBR had imposed one per cent SED on import and local manufacturing of goods. FBR issued SRO 655(I) 2007 to levy SED on import and local manufacturing of goods specified in the First Schedule of the Customs Act, 1969.
Later the rate was enhanced from 1 per cent to 2.5 per cent. The levy remained applicable for four fiscal years – 2007-11.
In the budget of Fiscal Year 2011-12, the government abolished 2.5 per cent special excise duty on all items.
Furthermore, federal government has also decided to impose special excise duty on import of vehicles over 1800 cc. In addition to this increase in duties on imported vehicles over 1800 cc is also expected.
Experts on the other hand said that the impact on different sectors is yet to be determined as it lacks clarity on which particular sectors the government would impose this along with the ability to pass on the impact to users end.
Increase in import duties, they said, would be positive for the local assemblers as the imported vehicles would become costly, thus leading demand of locally produced vehicles.
