ISLAMABAD, June 9: The government has withdrawn central excise duty (CED) on three items and rationalized on POL products.

According to notifications released here on Monday, CED exemption was allowed to heavy electrical complex (HEC) on paper wrapped copper conductor and transformer oil if used in the manufacturing of power transformers. However, the private sector was liable to CED. The conditional exemption of CED on transformer oil has also been extended to all the power transformer manufacturers.

The CED was also withdrawn on polyurethane resin provided it was used in the manufacturing of artificial leather and PVC sheets. However, exemptions would only be allowed to those manufacturers who directly import or locally purchase the item.

The government has rationalized CED on POL products: on lubricating oil to Rs7.15 per litre, on mineral greases from 50 per cent ad val to 25 per cent ad val, while CED was abolished on condensate oil (crude) supplied to refineries retrieved from natural gas pipeline.

The tariff and billing of natural gas has been converted from volume basis to heat contents basis by the natural gas companies. To make the CED rate rationalized and compatible with the calorific value, the rate of CED has also been converted to heat content basis. The new rate of CED on natural gas was fixed at Rs5.09 milli metre British thermal unit (mmbtu), to be effective from July 1, 2003.

To do away with the distortion in levy of CED on goods, the government has allowed CED exemption to raw materials, intermediary goods imported or locally purchased by the manufacturers located in export processing zones for use as raw materials, intermediary goods used in the manufacturing of finished goods.

According to the notification, no exemption of CED on finished goods—cement, beverages, cigarettes, etc.— would be available on import or locally purchased goods and the prevailing notification SRO574 issued on August 18, 2000 for imported goods has been rescinded concurrently.

Earlier, exemption of CED was available to all excisable goods if imported by manufacturers located in EPZs while at local stage, only raw materials, semi-finished goods were exempted if purchased by the units located in EPZs and used as raw materials/intermediary goods.

The CBR issued procedures for adjustment of CED paid on raw materials, semi-finished goods against CED payable on finished goods, which would facilitate the local industry as well as the department. The adjustment through ACL would now be possible, said CED general order.

The government had allowed adjustment of CED paid on raw materials or semi-finished or bulk goods at import stage, local stage, which were further used in the production of finished goods against the CED payable on locally produced finished good in the last year budget.