Equivalent to quantity exported to Kabul, CARs: no reduction in rate of FED on local supply of sugar: FBR

The Federal Board of Revenue would not allow reduction in the rate of the Federal Excise Duty (FED) from 8 percent to 0.5 percent on local supply of sugar equivalent to quantity actually exported by sugar mills to Afghanistan and Central Asian Republics.
In this regard, the FBR has issued SRO.77(I)/2013 here on Monday to give tax incentives on the export of sugar. According to the notification, the rate of the FED on white crystalline sugar (Pakistan Customs Tariff headings 1701.9910 and 1701.9920) would be 0.5 percent.
This is subject to the condition that the 0.5 percent rate of duty shall only be applicable to the quantity of local supply of sugar equivalent to the quantity actually exported by the sugar manufacturer, in accordance with the export quota allotted in pursuance of the decision of the ECC in its meeting held on January 10, 2013.
Secondly, the sugar manufacturer shall present the proof of such export to the concerned Commissioner of Inland Revenue along with the return for the tax period following the period in which such export took place. The sugar manufacturer shall also file the calculation in the form given in the Annexure to this notification along with the return. Thirdly, the quantity exported does not exceed the quota allotted in pursuance of the aforesaid decision of the ECC and benefit of this notification ie SRO.77(I)/2013 shall not be admissible in respect of exports by land routes to Afghanistan and Central Asian Republics.
If a sugar manufacturer actually exports any quantity of sugar, only then the sugar manufacturer is allowed to charge the FED on equivalent quantity of local sale of sugar on supplies made in the tax period succeeding the tax period in which the export took place, notification added.
The FBR has also specified the Annexure of the calculation of the FED output liability by sugar mills. It included total supplies during the tax period (Qty), local supplies and exports in the preceding tax period. It also included local supplies eligible for concessional rate, value of eligible local supplies including FED on eligible supplies @ 0.5 percent and FED on non-eligible local supplies @ 8 percent.