KARACHI: The Federal Board of Revenue (FBR) has notified the procedure for adjustment by steel melters of the sales tax paid at import stage on the specified categories of remeltable iron and steel scrap.
The adjustment procedure will be applicable only to such steel melting units, which are paying sales tax through their electricity bills.
Steel mills operated by sugar mills or other persons using self-generated electricity and steel melting and re-rolling units which have opted to pay sales tax on ad valorem basis are not entitled to this adjustment procedure.
According to Sales Tax General Order No. 18/2016, sales tax adjustment will be allowed only on import of remeltable iron and steel scrap and adjustment will be allowed only to the extent of sales tax paid at import stage on the specified scrap categories and which has actually been consumed in the production of steel products.
The said consumption shall be determined on the basis of consumption of 800 electricity units for the production of one metric ton of ingots/billets.
The Commissioner Inland Revenue after satisfying himself as to correctness of the adjustment claim will issue the Adjustment Certificate for the amount of sales tax paid at import stage, which would be adjusted from the sales tax charged through the electricity bill for a particular month on the basis of actual consumption of electricity units.