ISLAMABAD, June 19: The government has replaced the one per cent surcharge on imports announced in the Budget 2007-08 with a federal excise levy (FED) to comply with the WTO rules.

A senior official told Dawn on Tuesday that the surcharge duty could not be imposed at import stage as it would violate the rules of the WTO regime. Now, the change would be announced through the Finance Act 2007.

The levy was introduced to generate additional Rs13bn under the head of customs duty.

In the post-budget press conference CBR Chairman M Abdullah Yousuf and Member Customs Shahid Rahim Shaikh had said very confidently that the levy would not violate the WTO rules and WTO cannot stop the CBR from doing so.

But after a week the relevant authorities when pointed out that the levy was in violation of WTO rules, the CBR had changed it from surcharge to FED without any delay.