FBR Rescinds Notification Regarding FED on Cigarettes

The Federal Board of Revenue (FBR) has rescinded SRO.178(I)/2023 which considerably increased the Federal Excise Duty on cigarettes from Feb 14, 2023. The FBR rescinded SRO.178(I)/2023 through an SRO.515(I)2023 issued on Tuesday. However, the FBR’s SRO.515(I)2023 has no legal implications because the increased rates of FED on cigarettes are still part of the Finance (Supplementary) Act, 2023. Therefore, the revocation of the earlier notification will not affect the latest prices of cigarettes since the new FED rates were inserted through the Finance Supplementary Act, 2023. The FED rate under S. No. 9 and 10 of Table-1 of the First Schedule to the Federal Excise Act (FEA) had been increased through the Finance (Supplementary) Act, 2023. According to the rescinded notification i.e. SRO.178(I)/2023, under the first slab of cigarettes, locally produced cigarettes if their on-pack printed retail price exceeds Rs. 9,000 per 1,000 cigarettes, the rate of the federal excise duty would be Rs. 16,500 per thousand cigarettes. Under the second slab, the locally produced cigarettes if their on-pack printed retail price does not exceed Rs. 9,000 per thousand cigarettes, the rate of the FED would be Rs. 5,050 per thousand cigarettes, the notification added.