ISLAMABAD: The federal government is likely to extend for three months the currently imposed 5% and 10% Regulatory Duty (RD) on flat steel products (36 tariff lines) with sunset clause until March 31, 2025 to protect local steel industry, sources close to Secretary Commerce told Business Recorder.
Sharing the details, the sources said that National Tariff Policy 2019-24 stipulates that all proposals for levy, amendment or removal of tariffs shall be examined at the Tariff Policy Centre and after approval of the Tariff Policy Board (TPB) shall be submitted to the Cabinet or Parliament, as the case may be, for consideration.
In the Finance Act 2024, on recommendation of Tariff Policy Board, regulatory duties were imposed on several products including the iron and steel flat products with sunset clause till December 31, 2024 to provide temporary protection to the industry.
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Following the budget exercise FY 2024-25, several requests from the industry have been received regarding extension of the RDs beyond December 31, 2024.
The Tariff Policy Board in its 61st meeting held on December 26, 2024 analysed the requests of manufacturers of iron and steel flat products and recommended “to extend the currently imposed 5% and 10% RD on flat steel products (36 tariff lines) with sunset clause until March 31, 2025; and that the existing RD rates will be restored to their original position of 0% RD and 5% RD on April 1, 2025”.
Commerce Ministry, in its summary to the ECC stated that as per Sub-Section 3 of Section 18 of the Customs Act, 1969, the federal government is competent to take decisions regarding regulatory duties, proposing regulatory duties on relevant 36 iron & steel flat products, may be extended till March 31, 2025, as per recommendation of the Tariff Policy Board.
According to official documents, during the TPB Board meeting, Joint Secretary (Tariff Policy) stated that M/s International Steel Limited has requested for continuation of 5% and 10% regulatory duty on various finished flat steel products till June 30, 2025. The industry further requested that as a substitute of Galvanized steel, Galvalume steel is being imported to circumvent anti- dumping duties (5.36 to 40%) imposed on galvanized steel (5.36 to 40%); therefore, RD @ 10% may be imposed on Galvalume steel coils/ sheets (HS codes: 7210.6110, 7210.6190, 7210.6910, 7210.6990). He apprised that TPB during its 56th meeting held on 20th May 2024, recommended to impose RD @ 5% on those flat steel items where the existing RD was zero and increase the RD to 10% on those flat steel items where there was 5% existing RD, with sunset clause until December 31, 2024. The imposition of RD was for 6 months only to provide opportunity to the industry to approach NTC for trade remedy measures; i.e., anti–dumping duties.
Joint Secretary (Tariff Policy) explained the current tariff structure on flat steel products with customs duty (ranging from 11% to 20%), additional customs duty (ranging from 2% to 6%), regulatory duty (ranging from 5% to 10%) and anti-dumping duties (ranging from 5.36% to 40.47% on certain products). He added that during 2024-25 (July-Nov), the import value of the flat steel products increased by 4% only compared to the corresponding period of previous Financial Year. Similarly, total import of Galvalume steel (under the requested HS codes) in terms of value and the quantity has decreased by 13% and 8%, respectively. Contrary to the claim made by the company, there has been no increase in the import of Galvalume steel.
Joint Secretary (Tariff Policy) stated that since the surge in flat steel products during (July-Nov) 2024-25 is nominal in value, as well as, in quantity terms, therefore, continuation or increase in RD on flat steel products is not recommended as it will adversely impact the downstream industries. He further stated that under the IMF program MoC is committed (i) not to increase and (ii) to reduce the Trade weighted average tariff during the Funds’ program.
Copyright Business Recorder, 2025
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