The Federal Board of Revenue (FBR) has collected Rs 4.1 billion as Special Excise Duty (SED) during July-December (2007-2008) against half-yearly target of Rs 6 billion, reflecting a shortfall of Rs 1.9 billion.
According to the recent FBR quarterly review, an important revenue generation measure in budget (2007-2008) was imposition of one percent SED at domestic and import stages, with annual projected collection of Rs 12 billion.
The details revealed that the collection from SED at import stage has been relatively encouraging as 93 percent of the target has been met; however, collection from domestic SED has remained below expectations and requires further investigation and proper enforcement. However, notwithstanding this weakness, it may be safe to infer that the SED collection will improve in the second half of 2007-2008, and further streamline during the coming year.
About the excise duty collection from services, the report pointed out that the revenue from services including International Air Travel (IAT), Non-fund Services (NFS), franchise and insurance have gained prominent position in the overall FED collection.
The share of this new head has increased from 7 percent in July-December (2006-2007) to 15.5 percent in first half 2007-2008 in the domestically collected FED revenue. Within services 69 percent of collection is realised from IAT, followed by insurance (16 percent), NFS (13 percent) and franchise (2 percent). In absolute terms, Rs 5.1 billion have been collected during first half (07-08) against Rs 1.9 billion in the corresponding period last year.
It is important to mention that the half-yearly collection has exceeded the target by Rs 600 million; and if this trend of revenue realisation continues, it is expected that the annual revenue target from this source will be achieved.
A detailed analysis confirmed that only natural gas and services have recorded a double-digit growth in Federal Excise Duty (FED) collection and FED from beverages and cigarettes has increased by 9 percent and 6 percent respectively.
On the other hand, a negative growth of 4 percent and 39 percent has been witnessed in cement and POL products respectively. The negative growth in POL products has been due to its shrinking base in 2007-2008.
About cement, after nil collection in July 2007 due to procedural change, a hefty growth was observed during August, September and October. However, this pace has been lost in November and December, inviting further probing as production of cement and its clearance has remained strong all through this period, the FBR added.