President, Karachi Chamber of Commerce and Industry (KCCI), Shamim Ahmed Shamsi, has urged the Federal Minister for Finance, Syed Naveed Qamar, to allow full Federal Excise Duty (FED) input adjustments on beverage concentrates. In a communication to the minister, he said that the beverage industry not only pays FED on final products, but also on some input.
This situation existed in several industries, as well. In June 2003, such industries were allowed adjustment of CED (now FED) on inputs against CED paid on final product vide CGO 02/2003. However, after a few days, CBR (now FBR) in a clarification letter, disallowed such input adjustments, specifically for beverage concentrates, unmanufactured tobacco and POL products.
In June 2005, the federal budget allowed FED input adjustments to unmanufactured tobacco and POL products, but the beverage concentrates were left out as the only input on which FED input adjustment was not allowed. In June 2007, the federal budget only allowed partial, 25 percent, input adjustments for beverage concentrates, and industry is still not getting full input adjustments since then.
It is the only industry in Pakistan that has been given this discriminatory treatment by the previous government, which is unlawful," he said. He suggested that this discrimination should be removed and full FED input adjustment on beverage concentrates be allowed to the industry.
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