ISLAMABAD, May 1: The federal government is considering to convert central excise duty (CED) on four services — travel agent, shipping agent, advertising agent and insurance — into sales tax from the financial year 2002-03, reliable sources told Dawn.

The government had already converted CED on 11 services into sales tax in the budget of 2000.

The sources said that as a matter of policy, every year CED was being gradually phased out to be replaced with sales tax.

According to official figures, the CED raised from the four services stood at Rs317.444 million during the July-March period of the current financial year against Rs302.194 million collected during the same period last year, showing an increase of 5 per cent.

The tax authorities have raised Rs59.601 million from travel agents during the July-March period of the current financial year against Rs52.257 million collected during the same period last year, showing an increase of 14 per cent, while Rs16.286 million were collected from advertising agents during the same period against Rs20.16 million collected over the corresponding period last year, registering a decrease of 19.21 per cent.

The revenue raised from insurance during the July-March period stood at Rs241.557 million this year against Rs229.777 million collected during the same period last year, showing an increase of 5.12 per cent.

And the CED on shipping agent was projected under the customs duty, the sources added.

On central excise, major revenue is contributed by 6-8 commodities—cigarettes, cement and beverages.

The sources said that no more CED would be converted into sales tax, as the government would not be in a position to cover up the loss of complete abolishing of CED.

In pursuance of this policy, the revenue generated from CED declined from Rs62.01 billion in 1997-98 to Rs49.2 in the financial year 2000-01.