Payment of electricity bills, taxes: Fata furnace owners lobbying to get old system reinstated

Owners of the furnaces located in the Federally Administrated Tribal Areas (Fata) have started using their political influence to reinstate past system of paying lump sum electricity bill, without any other tax like GST or Income Tax, which may cripple the industries located in other areas of the country.
Sources said that these units had earlier closed down their operations, mainly due to military operation in various parts of Fata and because of their reluctance to pay electricity bill on the basis of actual consumption in addition to income tax and general sales tax.
There were over 25 furnaces in Fata, which had been paying lump sum Rs 1.5 million for a month on account of electricity bill. Apart from the electricity bill, the furnaces paid income tax at the prevailing rate and General Sales Tax at Rs 6 per unit of electricity. On the contrary, the steel melting furnaces in settled areas having same production capacity of 10 tons per day are paying approximately Rs 10 million per month.
Pakistan Steel Melters Association in its letter pointed out to the Minster for Water and Power, Raja Pervaiz Ashraf, which says that these furnaces were involved in excessive electricity theft. As a result, not only the government, but also the electricity distribution company was suffering huge loss. This has crippled the business of steel furnace located in Lahore and Gujranwala, which is the hub of furnaces in Pakistan. These furnaces are being forced to shut down or compile excessive liabilities.
Presently, these furnaces are closed but using political influence and exploiting their local problems to restart their furnaces with similar arrangements once again. The association urged the Ministry of Water and Power to take the matter seriously in the best national interest and would not to allow this malpractice to happen again.
It was further pointed out that since the time the steel melting industry has shifted to special procedure payment of sales tax on electricity units, small furnace of 100 kg to 1 ton production running on B-2 connection have cropped up.
The mushroom growth has rapidly spread in Lahore, Gujranwala and Frontier areas. These furnaces undergo the same process as the steel melting industry and manufacture billets. The association suggested that these furnaces in Fata be brought in the net and Rs 6 per electricity unit be levied on them as levied on B-3 connections. The Association's General Secretary Major Mansoor Mahmood (Retd) told Business Recorder that the production cost of billets produced by the furnaces in Fata was significantly less than that of the settled area.
These furnaces were used to market their product at low prices in Peshawar, Islamabad and other part of the Punjab province, thus creating unhealthy competition. On the contrary, the production cost of billet and other products produced by furnaces in Lahore, Gujranwala, Sialkot, Peshawar, Hattar and Gadoon is considerably high because of levy of income tax and General Sales Tax at Rs 6 per unit in addition to the electricity bill. He was of the view that the government should take measures to provide level playing field to the entire industry by charging income tax and general sales tax from the Fata-based furnaces.