FBR collects Rs 3.5 billion as FED from services in first quarter of 2010-11

The Federal Board of Revenue (FBR) has collected Rs 3.5 billion as federal excise duty (FED) from services including services provided by banking and insurance companies during first quarter of 2010-2011 against Rs 5.4 billion in the same period last fiscal.
The FBR quarterly report for July-September (2010-2011) revealed that the collection of FED from services has been Rs 3.5 billion during first quarter as compared to Rs 5.4 billion in the corresponding period last year. During July 2009, the collection from banking and insurance companies was accounted for before transfer to sales tax and resultantly, a lesser collection of one billion rupees was recorded in July 2010. Like top two revenue generators of revenues, the collection from cement has also come down by around 23% in the face of 15% decline in the production of cement.
Similarly, the collection of beverages has reflected a decline of 13.7% in the collection mainly due to 15% reduction in the production of beverages. At the same time, the collection from natural gas has shown a massive growth of 71 percent.
On the other hand, the collection of one percent special excise duty (SED) has recorded a growth of about 5.9% in the first quarter of current fiscal as compared to corresponding period last year. The report further said that around 76% of FED collection has been contributed by top six revenue spinners, namely; cigarettes, services, cement, beverages, natural gas and POL products. Apart from that, SED contributed robustly by around Rs 4 billion during July-September, 2010-11.
The contribution of FED in total collection has been 9.1% despite a narrow base tax. The collection under FED has been Rs 26.9 billion during July-September, 2009-10 entailing a decline of 5.2% (Table 15). The less than expected performance is mainly due to severe floods in August 2010, which has badly affected the large scale manufacturing sector. Similarly, decline in the production of major revenue spinners like cigarettes, cement, beverages and POL products has adversely affected the revenue realisation from these sectors.
The cigarette is the top contributor of FED with 27% share in total collection of FED. Its collection has recorded a 6.2% during the first quarter of current fiscal. The decline is attributable to 5.2% reduction in the production of cigarettes during the period.