The Federal Board of Revenue (FBR) has imposed a Rs5 per unit sales tax on electricity consumption for 100 manufacturers, melters, re-rollers, and composite units in the iron and steel sector, a move that is expected to increase steel product prices.
The FBR has issued a new Sales Tax General Order (STGO) for the steel industry, under which selected companies will be charged Rs5 in sales tax for every unit of electricity consumed. The relevant power distribution companies (DISCOs) will collect the tax through electricity bills.
The new tax will apply to melters, re-rollers, and composite units, as well as companies that meet the specified conditions for importing scrap.
According to the FBR, the measure aims to strengthen and improve tax administration in the steel sector. The order will take effect under the notification issued on August 4, 2026.
In a separate development, the FBR has also set up three Independent Case Scrutiny Committees (ICSCs) to review tax disputes before they move to higher courts. The move is aimed at reducing unnecessary litigation with taxpayers and ensuring greater consistency in legal decisions.
The committees have been formed under the Income Tax Ordinance, Sales Tax Act and Federal Excise Act and will operate in Islamabad, Lahore and Karachi.
The Islamabad committee will be headed by former Justice Athar Saeed, while former Justice Khawaja Farooq Saeed will lead the Lahore committee. Former Justice Maqbool Baqir has been appointed chairman of the Karachi committee.
Each committee includes legal experts and former senior FBR officials and will oversee tax cases from regional tax offices within their respective jurisdictions.
Under the new framework, the panels will examine whether cases should be taken to the High Courts or the Supreme Court, and will also review ongoing litigation to determine if continuing legal proceedings serves the government’s revenue interests.
The committees will also maintain a database of settled legal issues and court rulings to promote consistency in future cases. They have also been tasked with identifying legal or administrative gaps and recommending policy or legislative changes where needed.
The office order establishing the committees has been approved by the competent authority and has taken immediate effect.
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