MULTAN: Federal Board of Revenue has withdrawn the Statutory Regulatory Order (SRO) 422 on increase of federal excise duty on cigarettes. FBR had increased the taxes on cigarettes to cover the revenue shortfall of the fiscal year 2013-2014.
Federal Excise duty is now set the rate of tax under the Excise Act 2014. FBR has issued SRO 574 due to which, the previously issued SRO 422 will be considered null and void.
According to SRO 422, duty on cigarettes had been immediately increased in the range of 13.2 to 23.3 per cent. Federal excise duty on locally produced cigarettes having retail price above Rs 2,706 per one thousand sticks was increased by approximately 13.2 per cent.
However, due to withdrawal of SRO 422, FBR will have to expect shortfall of approximately Rs 30 Billion revenue collection in next year.
Federal government has awarded power to FBR for issuing and withdrawing SROs under Sales Tax Act 1990 and Federal Excise Act 1990 and 2014.