FEDERAL EXCISE GENERAL ORDER NO.1/2005

Subject: ISSUES RELATING TO SWITCH-OVER TO NEW EXCISE LEGISLATION.

In order to ensure that the old Central Excise System in respect of POL products is smoothly switched over to the new Federal Excise System, the Board is pleased to issue the following instructions for compliance by all concerned.

(i) In case of sales of POL products to Pakistan Navy, outgoing vessels or international flights entitled to exemption from excise duty, exemption of excise duty shall be reflected by the concerned oil refineries in their invoices issued to the oil marketing companies mentioning that the products covered therein are meant exclusively for the said users. In such cases, the oil refineries may issue invoices even subsequent to the completion of supply process as agreed between the refineries and oil marketing companies.

(ii) All POL stocks lying in the excise warehouses of oil marketing companies shall be converted into duty-paid stocks by 30.06.2005 and duty payable on such stocks shall be adjusted from balances available in the Account Current Ledgers (ACL) provided that where such balances are lower than the expected amount of duty, the concerned oil marketing company shall ensure that the required amount is deposited well in advance to make-up for the balance defenciencies in the ledgers.

(iii) In cases where after payment of excise duty on warehoused stock as aforesaid, any balance amount in the ACL shall be treated as input duty and adjustable against sales of other excisable goods made during the month of July, 2005 and relevant entries of the ACL shall be deemed to be at par with input excise duty invoice. However, refunds preferably through adjustment against future liabilities may be allowed where ACL surpluses are not used even during the month of July, 2005 under intimation to the Board.

(iv) In case of purchases of input goods made on payment of excise duty prior to 30.06.2005 and used in the manufacture and sale of finished excisable goods during July, 2005 and thereafter, the relevant applications for removal (ARs) showing the amount of duty shall be deemed as input duty invoices. However, where goods were received on payment of excise duty against invoices incorporating the amount of such duty, such invoices shall be acceptable for the purpose of Federal Excise Law.

(v) The standards of manufacturing wastages or losses already specified by the Government from time to time for the purpose of excise duty shall continue to apply in so far as they are applicable or relevant under the new system.

(vi) Where composite invoices are to be issued for sales tax and excise, till such time the old printed blank invoice stocks are exhausted, or changes in the computer programmes are made, the registrants may manually indicate the amount of excise duty and value for excise purpose in case excise duty is chargeable on advalorem basis, on the invoices under the signature of the registrant or his agent/employee authorized to sign such invoices.

(vii) Where switch over involves any change in IT applications, the Collectors may suitably condone the period of payment of duty and submission of excise returns for the month of July, 2005 without charging any default surcharge.

2. This order shall also apply to other products to such extent as may be necessary to facilitate the switchover to the new excise system.

(AAMER AMIN BHATTI)

Secretary (ST& FE-L&P)