Pakistan

License Requirements for Tobacco Manufacturing in Pakistan

Pakistan Tobacco Board (hereinafter referred to as the “ tobacco board”), established under Pakistan Tobacco Board Ordinance, 1968, is the apex body for the promotion of the cultivation, manufacture and export of tobacco and tobacco products and matters ancillary thereto. There also exist some rules relating to the tobacco which have to be followed by tobacco manufactures like Tobacco Marketing Control Rules, 1993. Also tobacco is subjected to the Federal Excise Duty so all the rules & regulations listed in the Federal Excise Act and Rules thereunder also be followed by the tobacco manufacturers.

List of Requirements for Marketing & Procurement of Tobacco in Pakistan

Intimation Regarding Purchase Targets

  • For proper regulation of tobacco marketing, the Tobacco Board ascertains the requirements of various tobacco companies for different types of tobacco for the ensuing crop and publicizes the same at the time when nurseries are being laid out. The underlying idea is to create an awareness of the manufacturer’s requirements among the growers so as to aim at a crop size bearing a relationship with the demand. The tobacco companies are bound to execute agreements with the tobacco growers in a prescribed format for their total demand of both types of Virginia as well as Burley tobacco.
  • Every tobacco company intending to purchase tobacco during a crop year shall indicate to the Tobacco Board its total requirements of the tobacco from the ensuing crop, by the 21st day of October in each year. The Tobacco Board will publicize the indicated requirements for various types of tobaccos, in appropriate manner, before the commencement of planting season. It shall be binding upon the Tobacco Companies to purchase tobacco in accordance with their indicated purchase targets.
  • The purchase targets intimated to the Tobacco Board by the Tobacco Companies shall not be altered in any form without prior approval of the Tobacco Board. The Tobacco Companies also discourages purchases from azad growers that are non-agreement holders.

Execution of Agreements

Every tobacco company for the purchase of their targeted requirements of Virginia tobacco shall execute agreements with the growers on the form prescribed by the Tobacco Board by the 31st day of December in respect of the ensuing crop of tobacco. A copy of each such agreement will be supplied to the grower concerned and a list of all such agreement will be furnished to the Tobacco Board as soon as may be possible after the execution of the agreements. The Tobacco Board shall constitute Committees of growers for scrutiny of agreements executed by each tobacco company in order to verify its genuineness.

Purchasing

  • It shall be binding upon the Tobacco Companies to purchase tobacco in accordance with their indicated purchase targets. All Tobacco Companies shall commence purchases of tobacco from the date as fixed by the Tobacco Board. For fixing that date the Tobacco Board shall constitute Committee comprising of its own official and representatives of Provincial Agriculture Department, tobacco companies and tobacco growers to fix a date or dates for the commencement of tobacco purchases after surveying the condition of standing crop in different areas.
  • No tobacco company or tobacco dealer shall close its purchase depots or business premises till such time it has purchased its full targeted demand of various types of tobacco, or in case of a surplus production, the additional quantity of particular type of tobacco which may be allocated by the Tobacco Board to the individual tobacco companies/dealers proportionate to their purchase targets.
  • Every tobacco company and dealer shall maintain complete and up-to date record of purchases made, prices paid at the depot, and quantities of tobacco transferred from the purchase depot to the warehouses or re-drying plants.
  • The Tobacco Companies shall submit to the Tobacco Board purchase summaries on daily basis during the marketing season

Payment of Dues to the Growers for Tobacco Purchased

Payment of dues to the growers by the tobacco companies as a result of sale transaction of Virginia tobacco during a purchase season shall be made through designated Banks and in accordance with the following schedule:

  • Payment in respect of tobacco purchased during the 1st fortnight (Within 7 days).
  • Payment in respect of tobacco purchased during the 2nd fortnight (Within 15 days).
  • Payment in respect of tobacco purchased during the 3rd fortnight (Within 21 days).
  • Payment in respect of tobacco purchased after the 3rd fortnight (Within 30 days).

All the Tobacco Companies and other purchasers shall issue vouchers to the growers having printed Book No; Voucher No. and Name/Place of purchase Center and a copy of each voucher issued to the growers shall be supplied by the Tobacco Companies/Purchasers to the Tobacco Board and the concerned Bank Branch.

List of Requirements for Flue-Cured Virginia Tobacco

  • Every Tobacco Company, for the purpose of purchase of its targeted requirements of flue-cured Virginia tobacco, will execute agreements with the growers of tobacco by the 31st December in respect of the ensuring crop of tobacco. A copy of each such agreement will be supplied to the growers concerned and a list of all such agreements will be furnished to the Tobacco Board as soon as may be possible after the execution of the agreements.
  • Every Tobacco Company and other purchaser of flue-cured Virginia tobacco shall strictly follow the grade classification of tobacco as laid down by the Tobacco Board vide its Notification No.SRO 522(1)/81 dated the 3rd June, 1981.
  • Every Tobacco Company and other purchaser of flue-cured Virginia tobacco shall prominently display at the purchase Depots the leaf sample of each grade and its minimum price notified by the Federal Government.
  • The weighted average price of tobacco for the crop of any year to be paid by a Tobacco Company to the tobacco growers shall not be lower than the weighted average price paid to them for the crop of the immediately preceding year.

There shall be constituted a Vigilance Committee at the purchase depot consisting of:

  • A representative of the Tobacco Board or the Provincial Agriculture Department.
  • A representative of the tobacco growers, nominated by the Provincial Agriculture Department.
  • A representative of the Tobacco Companies nominated by the Tobacco Companies.

The Vigilance Committees shall check the grades assigned to various types of tobacco used for the manufacture of cigarettes and shall also ensure that no purchaser unnecessarily rejects, or pays price for, tobacco at rates lower than the minimum notified rates. It shall also resolve the differences or disputes between the tobacco growers and tobacco companies, if any, arising out of sale and purchase transactions of tobacco between the parties. The decision of the Vigilance Committee shall be taken by majority and shall be binding on the parties.

  • The Tobacco Board will fix dates for the purchase of middle and top portion leaves keeping in view the purchase periods of such leaves during the past three years.

List of Requirements for White Patta (Mulki Tobacco)

  • All Tobacco Companies shall purchase at least 35 percent of their purchase targets of white patta tobacco indicated for any year direct from the tobacco growers; provided that where a Tobacco Company, during the crop of the immediately preceding year, had obtained 50 percent or more of its targeted requirements of white patta tobacco direct from the tobacco growers, it shall in no case reduce its direct purchase from growers below 50 percent of its indicated purchase target for the crop of any subsequent year.
  • For the direct purchase of white patta tobacco every Tobacco Company will chalk out a proper purchase program, exhibit the same at the Buying Courtyards a fortnight earlier and also inform the concerned growers about it.
  • Every Tobacco Company shall make available to the Tobacco Board, not later than the 15th May of each year, a list, in duplicate, of the tobacco growers from whom white patta tobacco is to be directly purchased by it. A copy of said list shall be supplied by the Tobacco Board to the Special Committee of Growers constituted by the Tobacco Board for the purpose of verification of the genuineness of tobacco growers from whom direct purchase is made by the Tobacco Company.

List of Requirements Under Federal Excise Act

  • Tobacco is subjected to the Federal Excise Duty so all the rules & regulations listed in the Federal Excise Act (hereinafter referred as the “FED Act”) and Rules thereunder shall also be followed by the tobacco manufacturers.
  • All tobacco manufactures are liable to be registered before commencing manufacturing by applying for registration to the relevant Collector. Where the application for registration is complete in all respects, the Collector or an officer authorized by him in this behalf, after conducting such verification or inquiry as is deemed necessary, shall forward the application to the Central Registration Office in the Federal Board of Revenue (hereinafter referred as the “FBR”) who shall issue a certificate of registration containing the registration number to the applicant.
  • Every manufacturer or service provider in respect of dutiable goods or services shall, at the time of applying for registration, declare in writing all details of his business premises including godowns along with the name, address, copy of National Identity Card, details of plant, machinery, raw materials, dutiable or other goods to be produced or dutiable or other services to be provided and any change in these particulars shall be intimated to the Collector within fifteen days of the change.
  • After getting registration under FED Act, every registered person has to furnish a return to the FBR for every month not later than 15 of each month for previous month.
  • If a manufacturer of cigarettes, smoking mixtures for pipes and cigarettes and dutiable cigars and cheroots receives from outside the registered premises any un-manufactured tobacco, then, the weight of each package, bale or bag shall be legibly marked and numbered serially and record the same accordingly so as to render them easily identifiable from their entries in the relevant accounts and records.
  • No excisable tobacco products other than cigarettes shall be sold from any registered premises.
  • No packet of cigarettes for consumption in domestic market shall be cleared from the manufacturing premises without printing thereon the retail price, health warning and the name of the manufacturer.
  • Federal excise duty chargeable on the clearances made during a month shall be deposited on the last working day of the month, in the designated branch of National Bank of Pakistan. Provided that the duty chargeable on the clearances, if any, made after the business or office hours on the last working day of a month, shall be deposited on the first working day of the following month.
  • No packet of cigarettes shall be removed and sold by the manufacturer or any other person without affixing excise stamp in such style and manner as may be prescribed by the Board in this behalf.
  • No packet of cigarettes shall be removed and sold by the manufacturer or any other person without affixing banderole in such form, style and manner as may be prescribed by the Board in this behalf.
  • No cigarettes shall be cleared from any factory unless these conform to the health standards prescribed by the Federal Government and nicotine and tar contents are duly printed on each packet of cigarettes and in case of failure to observe any such condition, embargo shall be imposed on clearance of cigarettes in such manner as may be directed by the Collector.
  • Apart from above, cigarette manufacturers should also keep all the books of accounts, records and issue invoices as are required under FED Act & Rules.

The cigarette packets cleared from manufacturing premises for export shall bear the following marks:

“NOT FOR SALE IN PAKISTAN” or such other code as the Central Board of Revenue may, for reasons to be recorded in writing, approve

“FOR EXPORT ONLY”; or MANUFACTURED FOR ____________________ (the name of their customer).

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One Comment

  1. Great post. Please explain the procedure of importing raw material for eliquids for ecigarette, including nicotine. Can these raw materials for eliquids including nicotine be imported legally into Pakistan? And would the production of eliquid require a manufacturing license? Thanks

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