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Federal Excise Duty (FED) basics

Federal Excise Duty (FED) basics

A basic understanding of Federal Excise Duty (FED) concepts would not only ensure that the tasks are performed easily but also in the prescribed manner.

adjustment

deduction of amount of duty paid on goods used in the manufacture or production of other goods from the amount of duty payable on such other goods in the prescribed manner

distributor

a person appointed by a manufacturer in or for a specified area to purchase goods from him for sale to a wholesale dealer in that area;

due date

in relation to furnishing a return under section 4, means the 15th day of the month following the end of the month, or such other date as the Board may, by notification in the official Gazette, specify and different dates may be specified for furnishing of different parts or annexures of the return.

dutiable goods

all excisable goods specified in the First Schedule except those which are exempt under section 16 of the Act;

dutiable supply

a supply of dutiable goods made by a manufacturer other than a supply of goods which is exempt under section 16 of the Act;

franchise

an authority given by a franchiser under which the franchisee is contractually or otherwise granted any right to produce, manufacture, sell or trade in or do any other business activity in respect of goods or to provide service or to undertake any process identified with franchiser against a fee or consideration including royalty or technical fee, whether or not a trade mark, service mark ,trade name, logo, brand name or any such representation or symbol, as the case may be, is involved;

goods

goods leviable to excise duty under this Act or as specified in the First Schedule and includes goods manufactured or produced in non-tariff area and brought for use or consumption to tariff area;

goods insurance

includes fire, marine, theft, accident and other such miscellaneous insurance;

import and export

respectively bringing into, and taking out of Pakistan by sea, land or air and shall be deemed to have always been so defined;

KIBOR

Karachi Inter Bank Offered Rate prevalent on first day of each quarter of the financial year

non-tariff area

Azad Jammu and Kashmir, Northern Areas and such other territories or areas to which this Act does not apply;

franchise

an authority given by a franchiser under which the franchisee is contractually or otherwise granted any right to produce, manufacture, sell or trade in or do any other business activity in respect of goods or to provide service or to undertake any process identified with franchiser against a fee or consideration including royalty or technical fee, whether or not a trade mark, service mark,trade name, logo, brand name or any such representation or symbol, as the case may be, is involved;

registered person

a person who isregistered or is required to be registered under this Act provided that a person who is not registered but is required to be registered shall not be entitled to any benefit or privilege under this Act or rules made there under, unless he is registered and such benefit and privilege, unless allowed by Board, shall be confined to period of registration;

sale and purchase

with their grammatical variations and cognate expressions, mean any transfer of the possess on of goods or rendering and providing of services by one person to another in the ordinary course of trade or busi ness for cash or deferred payment or other consideration;

services

services, facilities and utilities leviable to excise duty under this Act or as specified in the First Schedule read with Chapter

supply

includes sale, lease or other disposition of goods and shall include such transaction as the Federal Government may notify in the official Gazette from time to time;

tariff area

area other than the non-tariff area;

wholesale dealer

a person who buys or sells goods wholesale for the purpose of trade or manufacture, and includes a broker or commission agent who, in addition to making centrals for the sale or purchase of goods for others, stocks such goods belonging to others as an agent for the purpose of sale;

zero-rated

duty of Federal excise levied and charged at the rate of zero per cent under section 5 of this act.

For further information and clarification on various Federal Excise Duty (FED) concepts, kindly refer to the:

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