The government is contemplating to make amendments in Special Procedure for Excisable Services to impose 15 percent federal excise duty (FED) on the commission of shipping agents in the forthcoming budget for 2011-12. Sources told Business Recorder here on Friday that the Federal Board of Revenue (FBR) has proposed to make amendments in Special Procedure for Excisable Services to impose 15 percent FED on the commission of shipping agents in coming budget.
They said that FED is charged on shipping agents under section 3 of Federal Excise Act 2005, read with Table II (Excisable Services) of the First Schedule, under PCT heading 9805.1000 at prescribed rate. However, the revenue body is of the view that the rule 41 of Special Procedure for Excisable Services restricts this levy on commission charged by shipping agents on the net ocean freight amount of cost and freight export cargo only. Therefore, the shipping agents are not paying FED on commission earned on import cargo and other miscellaneous.
Keeping this in view, the FBR has therefore proposed to make amendments in sub-rule (2) of Rule 41 through Finance Act to incorporate this levy on export as well as import cargo. Sources further said that if the government imposed 15 percent FED, as said in the proposal, the legitimate revenue would be increased by 50 percent on this account.
According to the proposal, the sub-rule (2) of Rule 41 of Special Procedures for Excisable Services should be substituted as: "every agent shall pay at the rate of 15 percent of the value of excisable services, which shall be the commission charged by an agent for services provided or rendered by him; provided that in case of non-vessel operating common carriers (NVOCC), international freight forwarders, consolidators and slot carriers, FED shall be charged at Rs 200 per house bill of lading negotiated in the bank, instead of the rate specified above."
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