The Federal Board of Revenue has proposed a major revenue generation measure envisaging imposition of 10-16 percent Federal Excise Duty (FED) on the inland carriage of goods by train from next fiscal (2009-10). Sources told Business Recorder on Monday that the Ministry of Finance has received a budget proposal of the FBR to impose FED on the inland carriage of goods by train in budget (2009-10).
Presently, inland carriage of goods by air is liable to 16 percent FED under the relevant schedule of the Federal Excise Act. In case the government approves this proposal, excise duty would be applicable on the booking of freight excluding passenger's baggage. It would definitely increase the burden of tax on the transportation of cargo/freight through rail service. The applicability of 10-16 percent FED would also increase the cost of transportation for both businessmen as well as general public. The FBR has also forwarded the revenue impact to the Ministry of Finance for imposition of duty on such services.
Sources said that the proposal has been discussed during the budget-related meetings between stakeholders here on Monday. This might be one of the key revenue generation measures in coming budget. According to another proposal, the government may raise incidence of excise duty on various brands of cigarettes in budget (2009-10).