The Fruit Juice Council (FJC) has urged the government to rationalize the Federal Excise Duty (FED) structure on packaged fruit juices in the federal budget 2026-27 to support the documented industry, local agriculture, and healthier consumer choices.
Key Proposals
FJC has proposed two key measures: reducing the existing FED on packaged juice variants from 20% to 10%, and granting complete FED exemption to a new category of fruit juices with no added sucrose or white sugar. The council highlighted that the current taxation regime imposes a 20% FED in addition to 18% GST.
Impact of High Taxation
This high taxation has severely impacted the formal packaged juice industry, causing industry volumes to decline by more than 45% since 2023. The shrinking of the documented sector has also accelerated the growth of low-quality and unregulated alternatives in the undocumented market, adversely affecting food safety standards, tax compliance, and long-term government revenue generation.
Aatekah Mir Khan, CEO of Fruit Juice Council, said: “The industry is fully aligned with the government’s objective of promoting healthier consumption choices. We are proposing that the existing FED be reduced from 20% to 10% while exempting the new no-added-sucrose/white-sugar category from FED to encourage healthier innovation, improve affordability, and revive the documented sector.”
Faisal Ahmad Nisar, Board Member of FJC and CFO of Shezan International Limited, emphasized the impact on the agriculture ecosystem, stating: “The formal juice industry is deeply connected with local fruit farmers, pulp processors, and rural livelihoods. The continued decline of the documented sector is directly reducing demand for locally sourced fruits, discouraging investment in agricultural processing, and affecting thousands of farmers linked to the value chain.”
Differentiated Taxation Framework
FJC reiterated that fruit-based beverages are fundamentally different from carbonated soft drinks due to their direct linkage with Pakistan’s agriculture and fruit-processing sectors and should therefore be treated under a differentiated taxation framework. It urged policymakers to adopt a supportive fiscal framework that recognizes the sector’s critical role in agriculture, nutrition, and economic growth.
