Sources told Business Recorder here on Saturday that the FBR has obtained powers to impose 'further duty' through a notification on supply of excisable goods within the un-registered supply chain, bringing excisable commodities within the additional taxation. So far, the FBR has not exercised powers to impose 'further duty' on the pattern of 'further tax' from July 1, 2013. From next fiscal, the FBR can issue notification to impose new kind of 'further duty' on any excisable commodities.
Sources said that the 'further duty' can only be imposed on the supplies to the un-registered persons. A nominal rate of 'further duty' can be levied on supplies made to the un-registered persons. From next fiscal, additional FED can be imposed on supplies to the un-registered persons.
A tax expert said that the excise duties have been imposed to discourage consumption of certain excisable commodities like cigarettes and liquor etc in different countries. The FBR has used excise duty as revenue generation measure and its scope has been extended by introducing the concept of 'further duty'. Instead of using excise duties to discourage consumption of certain commodities, the FBR want to impose 'further duty' to generate additional excise duty in 2013-14.
Sources said that in the Sales Tax Act, 1990, a provision for imposing further tax on supplies made to unregistered persons has been introduced, as an incentive to obtain registration. Some goods and services are chargeable to federal excise duty but are not taxable under the Sales Tax Act, 1990. By insertion of a new sub-section (3A) in section 3 of the Federal Excise Act, 2005, the concept of "further duty" has been introduced. However, such further duty shall be chargeable only on such excisable goods and services as are specified by the Federal Government in a notification. No notification has been issued under this provision as present.