Limit of price tiers of cigarettes revised upward

The Federal Board of Revenue has revised upward limit of price tiers of cigarettes to enhance the Federal Excise Duty on locally produced cigarettes to generate additional revenue of Rs 10 billion in 2012-13. Through Finance Bill (2012-13) issued here on Friday, the duty has been enhanced through amendment to Table-I of First Schedule to the Federal Excise Act, 2005, effective June 2, 2012.
Under the revised slabs of duty on cigarettes, locally produced cigarettes if their retail price exceeds Rs 22.86 per 10 cigarettes, the rate of the FED would be 65 percent of the retail price. In case of locally produced cigarettes if their retail price exceeds Rs 13.36 per 10 cigarettes but does not exceed Rs 22.80 per 10 cigarettes, the rate of the FED would be Rs 7 and two paisa per 10 cigarettes plus 70 percent per incremental rupee or part thereof and locally produced cigarettes if their retail price does not exceed Rs 13.36 per 10 cigarettes, the rate of the FED would be Rs 7 and two paisa per 10 cigarettes. For the purpose of levy, collection and payment of duty at the rates specified, no cigarette manufacturer shall reduce price from the level adopted on the day of announcement of the latest budget. No manufacturer or importer of cigarette can introduce or sell a new cigarette brand variant of the same existing brand family at a price lower than the lowest actual price of the existing variant of the same brand family.
For the purposes of this restriction, current minimum price variant of existing brand means the lowest price of a brand variant on the day of announcement of Budget 2012-13. Any new brand introduced in the market shall not be priced and sold lower than 5 percent below the price of the Most Popular Price Category (MPPC). MPPC is the price point at which the highest number of excise tax paid cigarettes are sold in the previous fiscal year, the Finance Bill (2012-13) added.