The Federal Board of Revenue (FBR) has fixed the values of different steel products, in rupees and US dollars, for accurate assessment of sales tax at import and local supply stages.
In consultation with the relevant associations, the FBR has issued special procedure for the payment of sales tax by steel melters, re-rollers, ship breakers, Pakistan Steel Mills and Peoples Steel Mills, here on Saturday.
Under the mechanism, the value of billets supplied by Pakistan Steel Mills and Peoples Steel Mills has been fixed at Rs 32,300 per metric ton (PMT) to assess sales tax; imported billets, $500 PMT; imported re-rollable scrap, $400 PMT; re-rollable scrap supplied by ship breakers, Rs 24,000 PMT; and value of ingots and billets supplied by other steel melters has been fixed at Rs 27,335 PMT for assessment of sales tax.
Every steel-melter, steel re-roller and composite unit of steel melting and re-rolling (having a single electricity meter) shall pay sales tax at the rate of Rs 4.75 per unit of electricity consumed for the production of steel billets, ingots and mild steel (MS) products which will be considered as their final discharge of sales tax liability.
The payment of tax by steel melters, re-rollers and composite units of melting and re-rolling shall be made through electricity bills along with electricity charges. In case of default in payment of sales tax by the due date mentioned on the electricity bill, besides other legal action by the concerned Sales Tax Collectorate, the concerned electric supply company shall disconnect the electricity connection of the unit.
The ship breakers shall pay sales tax at the rate of Rs 3,500 per metric tonne of re-rollable scrap supplied by them. The quantity of re-rollable scrap shall constitute 70.5 percent of total LDT of the ship imported for breaking. The ship-breakers shall clear their sales tax liabilities pertaining to ships weighing up to 10,000 LDT within four months, while in case of ships weighing more than 10,000 LDT within eight months from the date of filing of Goods Declaration.
The sales tax liability shall be discharged by the ship-breaker either on completion of clearance of goods obtained from breaking of vessel or within the maximum time period allowed as aforesaid, whichever is earlier.
Under the rules, the Pakistan Steel Mills, Karachi, and People''s Steel Mills, Karachi, shall pay sales tax on their products under sub-section (1) of section 3 of the Sales Tax Act, 1990 read with section 7 and section 8B of the Sales Tax Act.
The steel melters and re-rollers, except Pakistan Steel Mills and Peoples Steel Mills, paying sales tax on fixed rates through electricity bills shall not be entitled to any input tax adjustment.
To deal with the invoices and returns, sales tax invoices shall be issued by steel melters to re-rollers showing sales tax amount of Rs 4100 per metric tonne. For downstream steel industry (the industry using steel products as raw materials for value addition purposes), sales tax invoices shall be issued by steel re-rollers using ingots/billets of steel melters showing sales tax amount of Rs 4717 per metric tonne.
Re-rollers using billets of Pakistan Steel Mills or imported billets shall issue sales tax invoices to downstream industry showing sales tax of Rs 5460 per metric tonne. For buyers other than downstream industry, steel re-rollers shall issue invoices showing sales tax of Rs 617 per metric tonne.
Sales tax invoices in respect of supplies of billets shall be issued by Pakistan Steel Mills and People''s Steel Mills showing sales tax amount of Rs 4845 per metric tonne.
Persons supplying imported MS products shall issue invoices showing sales tax of Rs 5460 per metric tonne, and ship breakers shall issue invoices of re-rollable scrap supplied by them showing sales tax of Rs 3600 per metric tonne. The remeltable scrap supplied by ship breakers shall be zero-rated.
Every steel-melter and steel re-roller paying sales tax under these rules shall submit a copy of electricity bill duly authenticated by the concerned Association along with sales tax return in the laid down format. The due date for filing of return shall be 28th day of the month following the tax period to which the electricity bill relates.
About the record keeping, the FBR has specified that every steel-melter, re-roller and ship breaker shall be required to maintain records specified under section 22 of the Sales Tax Act.
The All Pakistan Steel Melters'' Association and All Pakistan Steel Re-rollers'' Association shall be responsible to ensure that the steel melters and re-rollers pay sales tax in the manner specified in these rules, and in case of non-compliance, the association shall actively assist the concerned Collectorate for enforcement and recovery of sales tax due along with default surcharge calculated thereon, besides any other proceedings that may be initiated against the defaulting steel-melter or steel re-roller.
All Pakistan Steel Melters Association and All Pakistan Steel Re-rolling Mills Association shall be authorised to authenticate the paid electricity bills of steel melters and steel re-rollers paying sales tax under these rules. The associations shall be responsible to maintain unit-wise record of sales tax paid by all steel-melters and re-rollers on monthly basis.
Every case of default in payment of sales tax shall be reported by the President of the concerned Association to the concerned Collector of Sales Tax or any other officer nominated by the Board within seven days after the due date for payment of electricity bill.
A monitoring committee comprising of officers of Sales Tax, representatives of concerned Associations and any other person as may be nominated by the Board shall be constituted through a General Order to monitor the collection of sales tax under these rules on monthly basis.
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