PM Shehbaz Approves Decrease in Federal Excise Duty on Air Tickets 

Prime Minister Shehbaz Sharif has approved the reversal of the biggest taxation measure on the wealthy class by slashing the Federal Excise Duty (FED) of Rs. 50,000 to Rs. 30,000 imposed on Club, Business & First class international air tickets in the federal budget 2022-23. It has been learnt from reliable sources that the federal cabinet has given approval to the summary of the Revenue Division to decrease the FED on international air travel by Rs. 20,000. The decrease in the FED on the elite class negates the claim made by Finance Minister Miftah Ismail that the budget has targeted the rich and elite class. The FBR will issue the relevant notification in the coming days to slash the FED on international air travel. The FED on air tickets was increased from Rs. 10,000 to Rs. 50,000 in budget 2022-23 after approval of the parliament. The FBR recently clarified that the enhanced rate of the Federal Excise Duty (FED) of Rs. 50,000 would not be applicable on Club, Business & First class international air tickets issued before July 1, 2022. FBR stated that Federal Excise Duty is chargeable on Club, Business & First class international air tickets under Section 3 of the Federal Excise Act, 2005. Furthermore, sub-rule (8) of rule 41A stipulates that FED is chargeable at the time of issuance of air tickets. Thus, the enhanced rate of FED on air tickets under the new finance bill 2022 will be chargeable only on international tickets (Club, Business & First class) issued on and after 1st July 2022.