Federal excise duty in Pakistan (FED) applies to goods and services listed in the First Schedule to the Federal Excise Act, 2005. There is also a 15% default rate under section 3, but that is not a universal rate: scheduled items can have a different percentage or a fixed rupee amount. I checked the FBR’s consolidated Act amended through 30 June 2026, including Finance Act 2026 changes. The examples below come from that edition, not an old rate card.
If you manufacture, import or provide a scheduled service, check the exact tariff description and any exemption before calculating. I’ve spent the past 20+ years helping individuals, freelancers, and business owners across Pakistan file their taxes properly. For a case-specific FED or return question, you can ask a tax adviser to review the product classification and current FBR record.
Key takeaways
- Section 3 sets a 15% ad valorem default rate; First Schedule items use their listed rates.
- The schedule includes both goods and services, with fixed amounts as well as percentages.
- Section 4 requires registered persons to file a return for each month; the Act defines the due date as the 15th of the following month unless the Board specifies another date.
- Always match the exact tariff description, exemptions and current amendments before charging FED.
What is federal excise duty in Pakistan?
Federal excise duty in Pakistan is a federal levy under the Federal Excise Act, 2005 on specified goods, imports, services and other items covered by the Act. Section 3 says the default rate is 15% ad valorem, except where the First Schedule specifies a different rate. The schedule is the practical starting point for checking whether a particular supply is covered.
FED is not a synonym for sales tax. Both can relate to consumption, but their legal scope and schedules differ. A product being subject to one does not, by itself, tell you whether the other applies.
What are the current FED rates in Pakistan?
There is no single rate that applies to every FED item. In the FBR consolidated Federal Excise Act amended through 30 June 2026, section 3 states the 15% default, while the First Schedule gives item-specific rates. These examples are not a substitute for checking the full entry, conditions and exemptions before invoicing.
| Item in the First Schedule (Act edition through 30 June 2026) | Listed duty example |
|---|---|
| Aerated waters | 20% of retail price |
| Portland and similar hydraulic cements | Rs 4 per kilogram |
| Un-manufactured tobacco | Rs 390 per kilogram |
| Locally produced cigarettes above the stated printed retail-price threshold | Rs 16,500 per 1,000 cigarettes |
| Locally produced cigarettes at or below that threshold | Rs 5,050 per 1,000 cigarettes |
| Domestic passenger air travel: long route | Rs 1,500 |
| Domestic passenger air travel: short route | Rs 900 |
The cigarette entries include a price threshold and other qualifying wording; the air-travel entries have route and ticket conditions. The 2026 Act also sets international air-travel amounts by IATA area and cabin class, with new club, business and first-class ticket treatment for tickets issued from 1 July 2026. Read the official consolidated Federal Excise Act, 2005 PDF before applying any amount. Later notifications may change the position.
Why do FED rates differ by product or service?
The First Schedule lists particular goods and services rather than applying one flat percentage across the board. Some entries calculate duty as a percentage of retail price or charges; others set a fixed rupee amount per kilogram, call or passenger. The same broad product category can also contain different descriptions, thresholds or dates, so the exact entry matters. The June 2026 edition has amended rows. Check them.
For example, the Act distinguishes the two locally produced cigarette bands by printed retail price, and its international air-travel entry differentiates cabin class and destination area. Do not use a figure from a nearby row just because the product name sounds similar.
Who collects FED and who may have to pay it?
FED is administered federally by the Federal Board of Revenue. Who accounts for the duty depends on the transaction and the relevant provision; imported goods follow customs processes, while registered persons dealing in dutiable supplies or services have return and payment obligations under section 4. Start with the exact First Schedule row and the transaction date. That tells you which party and rate the law addresses, rather than relying on a general rule of thumb.
The Act also contains provisions that can place liability on a person in the supply chain where the law specifies it. That means you should not assume the manufacturer is always the only party responsible. Check the relevant First Schedule entry, applicable provision and transaction facts before deciding who must account for the duty.
How do you check whether FED applies?
Use the Act and schedule, not a generic “FED rate” search result. A product’s description, tariff heading, transaction type, exemption and date can all affect the answer. The FBR’s consolidated edition updated through 30 June 2026 is the current source used in this guide, but a later notification may apply to your transaction. Keep the invoice and product details beside you while checking the relevant row.
- Identify what is supplied: goods, imported goods, a service or another scheduled item.
- Find the matching description and tariff heading in the current First Schedule.
- Read the whole entry, including thresholds, dates, notes and any linked exemption.
- Confirm whether the rate is a percentage, a fixed amount or another measure.
- Check current FBR notifications and amendments for changes after the Act edition you consulted.
- Keep the classification and calculation support with your tax records.
If the wording does not clearly fit, get professional advice before adding FED to a customer invoice. A wrong classification can be harder to fix after returns and payments have been made.
When is the FED return due?
Section 4 requires a registered person to furnish a true and correct return for every month. The Act’s definition of “due date” sets the 15th day of the month following the month-end, unless the Board specifies another date; different dates may be notified for return parts or annexures. Confirm the current IRIS filing calendar for your period before relying on a date.
The duty due on dutiable supplies or services for a month must be deposited by the date prescribed for payment. The Act does not make the return filing date a safe assumption for every payment situation, so check the applicable rule or notification too.
How is FED different from sales tax?
FED applies to the goods, services and other items brought within the Federal Excise Act and its schedules. Sales tax has its own legislation and scope. The label on an invoice or a supplier’s tax treatment is not enough to determine whether an item owes FED, sales tax, both under applicable rules, or neither; verify the laws and any provincial service-tax overlap.
For a separate overview of Pakistan sales tax, see sales tax in Pakistan. FED treatment for a particular item still needs to be checked against the Federal Excise Act.
What mistakes should you avoid?
The most common avoidable errors are applying the default 15% to every item, using an outdated schedule, and overlooking a specific threshold or exemption. Another risk is confusing a federal excise entry with provincial sales tax on services. Small wording differences can change the result. Before filing or billing, compare the exact tariff description and date with the current FBR Act and any applicable notification; a remembered rate is not enough.
- Don’t treat 15% as the rate for every product or service.
- Don’t rely on an old blog or a rate card without its effective date.
- Don’t ignore tariff headings, route definitions, price bands or ticket issue dates.
- Don’t assume that a scheduled entry automatically means every transaction is taxable; check exemptions and conditions.
- Don’t treat the monthly return date as the payment date without checking the applicable rule.
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Frequently asked questions
What is the default federal excise duty rate in Pakistan?
Section 3 of the Federal Excise Act states a 15% ad valorem default rate, except for goods and services specified in the First Schedule. Scheduled items use the rate stated in their own entry, which may be a different percentage or a fixed amount. Check the current consolidated Act and notifications for the relevant date.
Is FED charged on every product in Pakistan?
No. FED applies to goods, services and other items covered by the Federal Excise Act and its schedules, subject to conditions and exemptions. A product’s broad name alone is not enough to decide liability. Match its description and tariff heading against the current schedule, then review any relevant exemption or notification.
Is federal excise duty the same as sales tax?
No. FED is imposed under the Federal Excise Act on specified items, while sales tax is governed by separate laws. Their coverage can differ, and service taxation may also involve provincial rules. Check the applicable legislation and the actual transaction rather than assuming one tax replaces or includes the other.
When is the FED monthly return due?
The Act defines the due date as the 15th day of the month following the end of the relevant month, unless the Board notifies another date. The law also allows different dates for parts or annexures. Check current FBR notifications and the IRIS calendar for your tax period before filing.
Who is responsible for paying FED?
Responsibility depends on the item and transaction under the Act. Registered persons have monthly return and payment obligations for dutiable supplies or services, and imported goods follow customs collection rules. The Act also provides for supply-chain liability where specified. Review the relevant entry and transaction facts instead of assuming one party is always responsible.
Can FED rates change during the year?
Yes. Finance Acts can amend the Federal Excise Act and its schedules, and the Board may issue notifications under the law. The examples in this guide come from the FBR consolidated Act updated through 30 June 2026. Before pricing or filing, verify whether a later amendment or notification applies to your transaction date.
Need help with a FED question?
If you’re unsure whether a supply falls under an excise entry, have the description, tariff heading, invoice and relevant period reviewed before filing. Taxadvisor.pk can assist with tax matters; contact the team through the verified service page and share the transaction details needed for a proper review.
Conclusion
Start with the exact First Schedule entry and the date of your transaction. If its wording is unclear, get the classification reviewed before you issue the invoice or file the return.
