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Duty on foreign travel deferred

July 01, 2006


ISLAMABAD, June 30: The Central Board of Revenue has delayed implementation of the levy of 15 per cent federal excise duty (FED) on international travel to Aug 1.

The excise duty was supposed to be effective from July 1.

The duty would be charged on international travel from Pakistan from Aug 1, irrespective of the date of issuance of tickets, said a CBR notification issued here on Friday night.

Through the Finance Act, 2006, in the budget, the government had extended the scope of 15 per cent FED to international travel excluding Haj flights.

Presently, 15 per cent FED is charged on domestic air travel.

Interestingly, the decision to levy FED on international travel has become part of the Finance Act, 2006, passed by the National Assembly on June 22.

Legally, for making changes in the Act, amendments have to be moved and passed by the National Assembly.

When contacted, a tax official told Dawn that the CBR could not hold in abeyance implementation of any decision of the Act.

The only way was to issue a notification to exempt the particular service or commodity from the levy of FED for a certain time, he added.

The normal process of notification involves prior vetting from the law ministry followed by allotting a number to the notification from printing corporation, which takes normally two to three days in case of urgency.