CED relief to Fata units on edible oil undisturbed

The exemption of central excise duty (CED) given to ghee/cooking oil units of Federally Administrated Tribal Area (Fata) and Provincially Administrated Tribal Area (Pata) through ''''special exemption order-2004'''' will remain unaffected from applicability of GST in Fata/Pata following decision of the Supreme Court.
In this regard, the CBR on Saturday issued instructions to the collector of customs, Peshawar.
Official sources told Business Recorder that the issue came to the limelight when the collector of customs sought clarification from CBR as to whether the special exemption of excise duty given to the Fata/Pata units in 2004 would remain valid after the recent Supreme Court decision.
The Supreme Court has suspended Peshawar High Court (PHC) judgement wherein it had barred CBR to collect taxes from Fata and Pata. Subsequently, the tax officials ordered sales tax recovery from the units situated in Fata/Pata. However, the collector asked CBR to explain whether exemption of excise duty could be made part of the sales tax liability during the recovery drive or not.
Under the ''''exemption order of 2004'''', exemption of excise duty was given on the import of edible oil for exclusive use in the manufacture of vegetable ghee and cooking oil by five units in non-tariff areas.
Officials said that legally the status of the special exemption order has not changed and the collector could not recover excise duty exempted through "Special Exemption Order".
According to the clarification issued to the collector of customs, Peshawar, the Board, vide its exemption order of July 8, 2004, had allowed exemption under sub-section (2) of section 12A of the Central Excise Act, 1944 (I of 1944) from central excise levy to Gul Shahzada Enterprise (Pvt) Ltd, Dargai, Malakand Agency, on the import of 1750 tons edible oil vide IGM No 376 of June 12, 2004.
This exemption was granted to provide relief to the manufacturers of Fata/Pata from excise levy on quantities of edible oil imported prior to announcement of budget 2004-05, but not cleared for use in manufacture of vegetable ghee/cooking oil.
Thus the said exemption stands unaffected by the decision of Supreme Court which relates to the applicability of the Sales Tax Act, 1990 to Fata/Pata and has nothing to do with the exemption of excise duty.
The instructions added that the amount of excise duty covered under the aforesaid exemption, therefore, cannot be made part of sales tax liability.