The FBR chairman informed the Senate Standing Committee on Finance that FBR has added an explanation in the Finance Bill 2019 that reads: "The duty payable shall always be borne by the cigarette manufacturer and the burden thereof shall not be passed on to the tobacco grower in any manner." Therefore, the tax would be borne by the manufacturers and not by the farmers or growers, Shabbar Zaidi added.
While showing satisfaction over the response of FBR chairman, the committee has withdrawn the recommendation of Senator Kalsoom Parveen that the SRO No 1149 should be withdrawn to facilitate commercial dealers and tobacco growers. To a query on FED on cars, the FBR chairman said that Federal Excise Duty (FED) would not be applicable on secondhand cars. He quoted an example that the FED of Rs 25,000 would be applicable on a new vehicle with price of Rs 1 million.
During discussion on increase in sales tax on sugar up to 17 percent, Zaidi said that as per FBR's analysis, the increase in price of sugar would be Rs 3.26 per kg following imposition of 17 percent sales tax.
On the issue of edible oil, the FBR chairman said that there is no increase in the rate of tax on cooking oil. There would be no increase in its price as only taxability mechanism has been changed. The FBR has not made any change in the rate of tax on ghee or cooking oil, he added. On the demand of the industry, only tax regime has been changed for ghee and cooking oil industry, Shabbar Zaidi explained.