FBR sets reduced sales tax rates for steel units in erstwhile FATA, PATA

According to Profit by Pakistan Today, the FBR has lowered the sales tax charged per electricity unit to Rs20 for melting and composite steel plants in the former FATA and PATA areas that depend on domestic remeltable scrap. A notification numbered SRO 1664(I)/2026, issued on Friday, amends the earlier SRO 1245(I)/2026 and reworks the power-based tax rates for several classes of steel producers. Re-rollers producing steel bars will pay Rs30 per unit whether their raw material is imported or bought locally.

Re-rollers in the same territories will also pay Rs20 per unit, whether they use imported or domestic inputs to produce bars. A further reduced rate of Rs5 per unit applies where imported material or remeltable scrap bought straight from Export Facilitation Scheme (EFS) registrants accounts for more than 70% over the preceding 12 months. According to the FBR, the step preserves an existing concession for these territories that stems from serial number 89 in Table-I of the Eighth Schedule to the Sales Tax Act, 1990.

Newly established businesses and steel units restarting after a shutdown will be assessed differently, with eligibility for the Rs5 rate based on their quarterly imports or purchases. The notification therefore uses a quarterly measure for those cases instead of the 12-month period.