The six major revenue spinners of the federal excise duty (FED) ie cigarettes, cement, natural gas, POL products, beverages and services contributed about 77 percent in FED collection during July-March 2010-11. According to the FBR quarterly review issued here on Monday, despite limited base, FED is contributing significantly to the national exchequer. A growth of 5.5 percent has been recorded in the net collection of FED during July-March, 2010-11.
The net collection stood at Rs 89 billion during July-March, 2010-11 as against Rs 84.4 billion during corresponding period last year. The six major revenue spinners of FED contributed about 77 percent in FED collection during July-March 2010-11. These major heads are cigarettes, cement, beverages, natural gas, POL Products and services.
Out of six major spinners of FED, 3 have exhibited positive growth ie natural Gas (87.4 percent), POL Products (9.4 percent) and Cigarettes. The higher growth in natural gas is mainly due to tariff hikes during the period. Growth from cigarettes has been mainly due to increased retail prices by upward adjustment in FED rates.
The FBR data revealed that the collection of federal excise has adversely affected due to contraction in its base. The large scale manufacturing sector has registered a modest growth of 1 percent during 2010-2011 as against 3% during the corresponding period of last year. Power shortage has been instrumental in less production, resultantly revenue from beverages declined by 17.6 percent due to decline in production by 14.4 percent. Similarly, cement production has declined by 9.8 percent adversely affected revenue collection by 9.3 percent. A decline of 29.6 percent in the services is attributable to the transfer of banking and insurance services from FED to sales tax domestic in the Budget 2009-10, the FBR added.
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