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    FED General Order 2 of 2008 - FED on Goods produced by Toll Manufacturer

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    FED General Order 2 of 2008 - FED on Goods produced by Toll Manufacturer

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    usama mayo
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    12 views2 pages

    FED General Order 2 of 2008 - FED on Goods produced by Toll Manufacturer

    Uploaded by

    usama mayo

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    GOVERNMENT OF PAKISTAN

    (REVENUE DIVISION)
    CENTRAL BOARD OF REVENUE
    ***

    C. No. 3(15)ST-L&P/99(Pt-I) Islamabad, the 6th October, 2008

    FEDERAL EXCISE GENERAL ORDER NO. 02 /2008

    Subject: FEDERAL EXCISE DUTY ON GOODS PRODUCED BY


    VENDORS (TOLL MANUFACTURERS) FROM THE RAW
    MATERIALS SUPPLIED BY THE PRINCIPALS.

    Federal Excise General Order no. 02/2005 dated 15.08.2005, in its


    para (vi), addresses some issues relating to payment of federal excise duty (FED)
    in cases where a vendor (toll manufacturer) manufactures goods from the raw
    materials provided by the principal. In view of further queries received in this
    respect, following clarifications are made:

    (a) Both vendor and the principal fall in purview of the definition of manufacturer
    as provided in the Federal Excise Act, 2005 and both shall discharge their liability
    to pay duty under the law.

    (b) The assessable value for excise duty payable by the vendor shall be the
    actual consideration in money received i.e. the gross conversion charges
    received.

    (c) The aforesaid principle will also apply to cases where the goods so
    manufactured by the vendor are otherwise chargeable to FED on the basis of
    retail price. The principal will pay duty on the basis of retail price, inclusive of all
    duties, charges and taxes other than sales tax, whereas the vendor will be
    liable to pay duty only on his gross conversion charges.

    (d) The vendors shall not be entitled to any adjustment in case of duty-paid input
    goods used in the manufacturing process as are owned by the principal. However,
    the vendor shall be entitled to adjust FED paid by him on direct input goods which
    are purchased by him on payment of duty.

    (e) The principal shall be entitled to adjust FED paid by him to the vendor against
    conversion charges as well as the duty paid by him on the raw materials owned
    by him, as were supplied to the vendor for manufacturing, against the final liability
    of the principal.

    (f) The vendors shall comply with all the applicable provisions of the Federal
    Excise law and the principals will not be required to pay any duty on the
    movement of such raw materials or inputs from their possession to the vendors
    for the purpose of manufacture or production of excisable products on their behalf,
    though they will properly account for such movements in their records.

    (g) The aforesaid procedure shall also be applicable to Special Excise Duty (SED)
    payable under SRO 655(I)/2007 dated 29.06.2007. However, as regards
    adjustment, it is clarified that adjustment of SED can only be made against SED
    and the same principle applies to FED payable under First Schedule of the
    Federal Excise Act, 2005.

    (Abdul Hameed Memon)


    Secretary (ST&FE-L&P)

    Copy to:
    All Collectors
    M/s. KPMG Taseer Hadi & Co.
    M/s. Unilever Pakistan, Karachi.

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