FBR rescinds SRO but new FED rates on cigarettes to remain intact

ISLAMABAD: The Federal Board of Revenue (FBR) has rescinded SRO 178(I)/2023 which has considerably increased the Federal Excise Duty (FED) on cigarettes from Feb 14, 2023.

The FBR has rescinded SRO 178(I)/2023 through SRO 515(I)2023 issued on Tuesday.

The SRO 515(I)2023 issued on Tuesday revealed that in exercise of the powers conferred by clause (b) of subsection (3) of Section 3 of the Federal Excise Act, 2005, the FBR has rescinded its Notification No SRO 178(1)/2023, dated February 14, 2023.

The issuance of the FBR’s SRO 515(I)2023 has no legal implications because the enhanced rates of FED on cigarettes are still part of the Finance (Supplementary) Act, 2023. Therefore, the new FED rates on cigarettes would remain intact.

The revocation of the earlier notification will not affect the latest prices of cigarettes since the new FED rates were inserted through the Finance Supplementary Act, 2023. The FED rate under S. No. 9 and 10 of Table-1 of the First Schedule to the Federal Excise Act (FEA) had been increased through the Finance (Supplementary) Act, 2023.

According to the rescinded notification i.e. SRO 178(I)/2023, under the first slab of cigarettes, locally produced cigarettes if their on-pack printed retail price exceeds Rs 9000 per 1000 cigarettes, the rate of the federal excise duty would be Rs 16,500 per thousand cigarettes.

Under the second slab, the locally produced cigarettes if their on-pack printed retail price does not exceed Rs 9,000 per thousand cigarettes, the rate of the FED would be Rs 5,050 per thousand cigarettes, the notification added.

Copyright Business Recorder, 2023