LAHORE: The formal packaged juice industry has urged the government to take immediate action in the upcoming federal budget, requesting a significant cut in the Federal Excise Duty (FED).
The juice industry is calling for a substantial reduction in the Federal Excise Duty (FED), which was introduced in 2023 at a rate of 20 per cent, compounded by an existing 18pc General Sales Tax (GST). According to a spokesperson for the Fruit Juice Council, this combined burden is severely impacting the documented sector and leading to serious economic repercussions.
The sector, which was expecting sales exceeding Rs72 billion in FY23, witnessed a 45pc plunge to Rs42bn. This has stalled industry growth and resulted in a considerable shortfall in the government’s revenue projections for the current fiscal year.
The exorbitant tax burden, effectively pushing the tax component on a pack of juice to around 42pc of its price, has fundamentally impacted consumer affordability.
This has inadvertently fuelled an alarming surge in the undocumented sector, which offers cheaper, low-quality, and potentially unsafe alternatives that evade all tax obligations, it says.
The industry claims that the repercussions extend beyond the industry’s bottom line. The drastic reduction in demand from the formal sector has severely impacted the rural economy, particularly fruit farmers. At its peak, the industry procured over 100,000 tonnes of fruit annually from local growers.
Published in Dawn, May 25th, 2025