Did you hear about Central excise duty? If you are familiar with this term, it will be more convenient for you to understand Federal excise duty in Pakistan. The word ‘federal’ replaces ‘central’ and is better described by the Federal excise act, 2005.
Its basic information is mandatory for you if you are concerned with manufacturing and sales of goods and services, either directly or indirectly. You should learn about FED basics to do your tasks accurately.
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Federal Excise Duty Act
Deducting the amount of duty paid on goods used to make or produce other goods from the amount of duty due on those other goods in the prescribed manner is Federal excise duty. It is best described by the Federal excise act 2005. It revokes the Central Excises Act of 1944. Following are the amendments made in this Act:
- The word "Central" was changed to "Federal." That makes the name "Federal Excise Duty" more applicable than the "Central Excise Duty."
- Contrary to the previous method, clearances do not require gate passes.
- Adjustment of the excise duty paid on the input products used directly in producing excisable items is permitted, and double taxation has been removed.
- All clearances will now be self-assessed, and no prior approval for clearance will be necessary, thanks to the complete elimination of the physical supervision system.
- On various services and items, FED is payable in VAT more, i.e., by the Sales Tax Act of 1990's provisions. See the link on this page labeled "Goods/Services Liable to Excise Duty" for more information.
- The duty on all clearances made during the month is due by the 15th of the following month.
- The duty is paid every month. In contrast, the earlier requirement that duty was supposed to be paid before the clearance.
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What Are The Non-Tariff Areas?
Some areas to which this Act does not apply; are non-tariff areas. These areas also include;
- Azad Jammu and Kashmir
- Northern Areas
What Are The Dutiable Goods?
FED is payable on the following goods:
- Goods Produced Or Manufactured In Pakistan
- Goods Imported Into Pakistan
- Services, provided or rendered in Pakistan
- Good produced in or manufactured
- Non-tariff areas and sold in tariff areas
What Is Special Excise Duty?
A particular FED of 1% has been imposed on items produced or imported in Pakistan. The Federal Excise Act of 2005's First Schedule specifies FED in addition to this charge. For a list of items not subject to this particular duty.
Exemption Of Good And Services ____ Section 16
The following are the exemptions:
- The goods and services listed in the First Schedule are subject to the rates and conditions of Federal Excise Duty set forth therein.
- No adjustment in accordance with section 6 shall be admissible in respect of goods exempt from the duty of excise, whether conditionally or otherwise. The goods and services specified in the Third Schedule shall be exempt from duty subject to such conditions and restrictions, if any, specified therein.
- The commodities listed in the Second Schedule shall be subject to FED in accordance with Section 7 of the Federal Excise Act of 2005 and the Sales Tax Act of 1990.
Before you file tax, whether it is FED, Property Tax In Pakistan, or any other tax, ensure you get complete information. Calculate the tax yourself and follow the proper procedure to file the tax.
