The FBR has notified 99 registered iron and steel manufacturers that will be charged sales tax at the rate of Rs5 per unit of electricity consumed. The tax will be collected directly through electricity bills issued by the relevant power distribution companies.
The special mechanism applies to eligible melters, re-rollers and composite steel units whose qualifying imports and purchases of specified categories of scrap exceeded 70 percent of their total scrap purchases during the preceding twelve months. Eligible manufacturers must also be properly integrated with the FBR’s computerized monitoring system.
The notified list is not permanent and may be revised by the FBR or on the recommendation of the relevant Commissioner Inland Revenue. Field formations may review whether a manufacturer continues to satisfy the prescribed conditions, while affected businesses may approach the concerned Commissioner where the application of the regime creates genuine hardship.