The Federal Board of Revenue (FBR) has started assessing the inventories of all ghee/oil manufacturers to ascertain the actual position of stocks of locally-produced oil in June this year. The FBR issued instructions in this regard to its Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) on Friday.
According to FBR instructions, the new federal excise duty at the rate of Re 1 per kilogram is also applicable on stocks of locally-produced oils purchased by manufacturers of vegetable ghee and cooking oil and lying in the premises of the said manufacturers. Thus, immediate stocktaking of the ghee/oil manufacturers would be started without any delay to check the stock position of locally-produced oil.
The FBR said that at present, edible oils (excluding epoxidised soyabean oil), vegetable ghee and cooking oil are excisable goods being listed at S. No 1 and 2 of Table I of the First Schedule to the Federal Excise Act, 2005. However, vide SRO 24(1)/2006 dated 7th January, 2006, federal excise duty at the rate of Re 1 per kg was levied at import stage in lieu of the federal excise duty payable at production or manufacturing stage. Although vegetable ghee/cooking oil manufactured from locally produced oil was chargeable to federal excise duty at the rate of 16 percent, some manufacturers avoided payment of federal excise duty on vegetable ghee and cooking oil manufactured from locally-produced oil on the pretext of using imported edible oil. In order to curb such practices, the following measures have been taken, all effective from June 13 this year: Firstly, oilseeds have been made excisable by insertion of a new S. No 54 in Table 1, having a rate of 40 paisa per kg.
Secondly, vide SRO 508(1)/2013 dated June 12, 2013, federal excise duty at the rate of 40 paisa per kg has been levied at the stage of import of oil seeds in lieu of the federal excise duty payable at production or manufacturing stage of vegetable ghee/cooking oil.
Thirdly, vide SRO 507(1)/2013 dated June 12, 2013, federal excise duty at the rate of Re 1 per kg of locally produced oil purchased by a manufacturer of vegetable ghee/cooking oil, in lieu of the FED payable at the rate of 16 percent on vegetable ghee/cooking oil produced or manufactured from locally produced oil.
The FBR said that it is important to note that this levy also applies to stocks of locally produced oils purchased by manufacturers of vegetable ghee/cooking oil and stocks still lying in their premises. Therefore, all RTOs/LTUs are directed to immediately conduct stocktaking of the ghee/oil manufacturers falling in their respective jurisdictions to ascertain the position of stocks of locally produced oil lying with them as on June, 2013. All RTOs/LTUs are required to send copies of the stocktaking reports to the Board by June 15, 2013, FBR's instructions stated.