FBR has proposed imposition of Special Excise Duty (SED) on import (of input and finished products) and locally produced goods where SED paid on inputs will be adjustable against final SED paid on locally produced goods from the same. SED is proposed at a rate of 1%-2.5%. It will be applicable to fertilizer industry inputs, fertilizer final products, pharma, tin plate, computers, gold/silver, foreign currency and other sources of fuel (if imported). If imposed, it will raise urea prices by PRs16-PRs38/bag assuming its applied to pre-GST factory prices. This is a pass-on item, but can hurt industry pricing power if the govt intervention continues, limiting price pass-on in case of any gas price hike in future (like it did in Jan-14).
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