ISLAMABAD, June 3: The government is considering a proposal to raise rate of central excise duty (CED) on beverages for arresting the constant decline in revenue collection from the commodity.

Well-placed sources told Dawn on Tuesday the expected raise in the CED collection would be from current 12 per cent to 15 per cent to maintain the growth in revenue collection from this head. The decision if taken was likely to be announced in the upcoming budget for 2003-04, they said.

The beverage manufacturers have recently asked the government to further reduce the CED rate. But the government declined the demand. The proposal was under consideration following the 16 per cent decline in CED collection from the commodity recorded during the first three quarters of the current financial year, over the same period of last fiscal.

The sources said the main reasons for this unimposing track record was reduction in the rate of duty from 15 per cent to 12 per cent in the last budget with the aim that the beverage manufacturers would decrease the price of the commodity.

According to the sources, the beverage manufacturers had not come up to their proposal to reduce the price of the commodity.

They said that despite all the concessions in duty, the clearance of beverages registered a decrease of 15 per cent during the same period under review, which resulted in raising of less revenue from the commodity.

Official statistics showed the CED collection from Beverages — one of the big revenue spinners — decreased continuously at a rate of 16.3 per cent in the first quarter; 12.7 per cent in the second quarter; and 18.4 per cent in the third quarter.

Incidentally, the CED revenue from concentrates of beverages has increased in the third quarter by 28.7 per cent, indicating that the manufacturers are anticipating a revival of demand in beverages in the summer season.

The sources said that among other reasons for the decline of revenue was boycotting of the beverages by the people in the wake of the American invasion of Iraq.

With this move, the purchase of beverages has also declined in the major cities of the country, sources said. The tax authorities were also devising some measures to avoid the chances of tax evasion in the beverages sector in the forthcoming budget, they added.