The Federal Board of Revenue (FBR) has announced new sales tax rates for the steel sector, including a sales tax of Rs30 per unit of electricity consumed by certain steel re-rolling mills.
According to the details, the FBR has formally issued a notification amending SRO 1245, introducing revised sales tax rates for different categories of steel units.
Under the new rates, re-rollers producing steel bars from imported or locally sourced raw materials will be required to pay Rs30 in sales tax per unit of electricity consumed.
Units using locally sourced re-meltable scrap will be subject to a sales tax of Rs20 per electricity unit, while steel re-rollers operating in the former FATA and PATA regions will also pay Rs20 per unit.
For steel units in former FATA and PATA where the use of imported raw materials or re-meltable scrap exceeds 70%, the sales tax rate has been set at Rs5 per electricity unit.
Newly established and restarted steel units will be eligible for a concessional sales tax rate of Rs5 per unit, subject to criteria based on their quarterly imports or purchases.
The FBR has also allowed steel melters, composite units and re-rollers to adjust the sales tax collected through their electricity bills against their output sales tax liability.
According to the notification, a steel manufacturer’s category can only be changed after verification through the FBR’s production monitoring system.
The notification further states that electricity connections associated with steel businesses will remain linked to the business even if the lease, ownership or nature of the business changes. The connections will not be changed on that basis.
