KARACHI: The Federal Board of Revenue (FBR) has enhanced the rate of sales tax to 10.5 percent from 9 percent on each unit of electricity consumed for the production of steel billets, ingots and mild steel products excluding stainless steel.

FBR issued SRO 583(I)/2017 regarding payment of enhanced rates of sales tax by steel industry.

However, the payment of sales tax at the rate of 10.5 percent per unit of electricity shall be the final discharge of liability of steel re-rolling units and composite units of melting and re-rolling including their pre-heating sections operated through fuels other than electricity.

Adjustable sales tax at the rate of Rs. 5,600 per metric ton will be levied and collected on import of re-meltable iron and steel scrap falling under PCT headings 7204.3000, 7204.4100 and 7204.4990, from those discharging sales tax liability of Rule 58H (1) and Rs8,400 per ton from other importers, whereas non-adjustable sales tax Rs. 5,600/- per metric ton shall be levied and collected on import of waste and scrap of compressors falling under PCT heading 7204.4940.

The FBR said that steel melters discharging their liability under sub rules (1) and (2) shall submit paid electricity bills of last three months at the time of filing of goods declaration.

The FBR also increased the sales tax rate for ship breakers and they shall pay sales tax at the rate of Rs8,500 per metric ton from previous rate of Rs8,000 per metric ton of re-rollable scrap and other materials obtained from ship breaking on such supplies determined at 80 percent, in case of oil tankers and gas carriers and at 72.5 percent for other vessels, of the total LDT of the ship imported for breaking.