CED on juices and squashes not to be abolished

ISLAMABAD (June 02 2003) : The government has dropped a budget proposal to abolish central excise duty (CED) on juices/squashes.

Under comprehensive changes made in the excise regime in the next budget, the government would totally abolish central excise duty (CED) on wire and cable and paper and paperboard, while excise duty on cement would be slashed from Rs 1000 per tonne to Rs 750 per tonne.

The proposal to withdraw CED on paints and varnishes in the coming budget has been rejected.

The government would introduce a single rate of excise duty on lubricating oils and reduce 50 percent excise duty on industrial mineral greases.

The government would also give option to all excisable industries operating under 'self-clearance' procedure to operate under 'supervised clearance'.

Sources said here on Sunday that the officials had earlier agreed

to abolish excise duty on juices from fiscal year 2003-2004, but after hearing the viewpoint of soft drink industry, they decided not to do away with CED on fruit juices.

The excise duty on wire and cable and paper and paperboard would be abolished to encourage housing and construction sector.

Similarly, withdrawal of CED from these items would increase demand of these items in Afghanistan undergoing reconstruction.

Instead of 20 percent annual reduction in excise duty on cement, the officials would now make 25 percent reduction per year in the rate of excise duty on cement and, ultimately, abolish it in four years.

The duty would be reduced from Rs 1000 per tonne to Rs 750 in next budget.

`Currently, lubricating oil is liable to 10 percent ad valorem, or Rs 7.15 per litre, whichever is higher.

The composite rate of excise duty was creating problems for the importers, manufacturers and even tax collectors.

From fiscal 2003-04, the government would introduce a single rate of Rs 7.15 per litre on lubricating oil at both local and import stages to facilitate all stakeholders.

The CED on mineral greases is 50 percent ad valorem on both import and local stages. Fifty percent reduction would be made in the rate of CED on mineral greases by slashing duty from 50 percent to 25 percent.

Multiple rate of excise duty is being charged on condensate oil (sludge) recovered from gas pipelines.

The government would treat excise duty as 'nil' on this product to check variations in the rate charged at different collectorates of sales tax and central excise.

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