SATURDAY JUNE 25: No FED on white cement from July 1

ISLAMABAD: The Federal Board of Revenue (FBR) has abolished federal excise duty (FED) on white cement from July 1, 2011. The FBR has issued SRO 633(I)/2011 for an amendment in SRO 474(I)/2009 dealing with exemption of FED on certain items. According to SRO 633(I)/2011, exemption of FED on white cement would be applicable from July 1, 2011.
Sources said that the white cement is basically a filling material used in the fitting of ceramic tiles, etc. Unlike grey cement, white cement has specific and limited scope of use. The white cement is mostly used like plaster of Paris for fitting of tiles, etc. As compared to grey cement, the use of the white cement is less. The Revenue Advisory Council had recommended to the FBR to abolish the duty on white cement.
In budget (2011-12), the Board had withdrawn the federal excise duty on cement in phases, ie during three years commencing from 2011-12. During the first year, duty will be reduced by Rs 200, where after it will be reduced by Rs 250 during each of the next two years.
The revenue loss shall be compensated by increase in legitimate trading of cement in local market. The withdrawal of the FED on white cement would accord uniform treatment to available substitutes and to re-vitalise industry. The FBR will suffer revenue loss of Rs 3 billion following year-wise reduction in the FED on grey cement and total abolition of duty on the white cement.
The FBR is reducing excise duties in phases under government policy to completely abolish them from the next two years. The government has abolished federal excise duty on 15 goods in budget 2011-2012. Following is the text of the notification issued here on Friday:
"In exercise of the powers conferred by sub-section (2) of section 16 of the Federal Excise Act, 2005, the Federal Government is pleased to amend its notification No SRO 474(I)/2009, dated the 13th June, 2009, namely:- In the aforesaid Notification, in the Table, in column (1), after serial number 3 and the corresponding entries relating thereto in columns (2) and (3), the following new serial number and the entries relating thereto shall be added, namely:- '4. White cement-Respective headings'. "This notification shall take effect on and from the 1st day of July 2011".