Juice industry urges cut in FED to boost revenue

The Fruit Juice Council (FJC), representing the formal juice industry, has urged the government to reduce the 20% Federal Excise Duty (FED) on juices to 15% to generate higher revenue than the outgoing financial year.

The current 20% FED, in addition to 18% GST, has stalled industry growth. In FY2024-25, government revenue projections fell short, suggesting the industry has hit the Laffer Curve — where high taxation leads to lower sales and declining revenue. Under local rules, fruit drinks must have at least 5% fruit content, nectars 25-50%, and pure juices 100%. These juices are healthier due to their fruit content. Punjab and Sindh Food Authorities permit the sale of fruit-based juices in schools while restricting other beverages.

Due to falling sales, fruit procurement dropped below 2017 levels. Only 20,233 tonnes of mangoes were purchased last year compared to 31,000 tonnes in 2017-18, hurting farmers and pulpers.

While the government claims it supports a documented economy, such policies contradict that goal. The 20% FED and 18% GST are driving consumers toward low-priced, low-quality, and potentially unsafe options from the undocumented sector, which continues to grow.

The budget also proposes capping the chilling charge adjustment at 5% instead of 10%, further burdening manufacturers.