'PSRMA wants SRO 678 revised'

Pakistan Steel Re Rolling Mills Association (PSRMA) has been talking to FBR/EDB along with all stakeholders pre and post budget about the amendment to SRO 678 dated 6.7.2007.
A series of meetings have taken place in Islamabad and even though all stakeholders including the FBR have agreed to the suggestions of PSRMA they have dragged their feet in implementing the suggestions putting the whole steel industry in disarray.
The steel industry is on special procedures and the FBR had fixed sales tax rates on electricity consumed at Rs 6 per unit when steel prices were at the highest in June 2008. This was to be the final sales tax liability. However, because of the crash in steel prices of raw materials by over 60 percent, excessive loadshedding in the country and development works having been curtailed the liability of Rs 6 per unit needs to be revised to Rs 4.75 per unit to give some relief to the steel industry.
All workings agreed by all stakeholders have been given to the FBR in this connection. Over the last financial year 2008/09 by paying sales tax at Rs 6 per unit worked out to a sales tax rate of over 20 percent which has continued from October 2008 right up to June 2009. This was more than 25 percent more than the regular sales tax rate of 16 percent. PSRMA feels that all exercise and meetings conducted in Islamabad at vast expense to our members have all been futile and waste of time and effort, which has led to despondency and a state of limbo in the industry.
In the past suggestions by our association have led to increase in revenue in the form of sales tax to the FBR and revenues increased by Rs 12 billion in the year 2007/08. However, due to late action by FBR in amending ITP prices on raw materials coupled with no relief being given to the industry in sales tax on electricity has led to a drastic drop in the sales tax collected for the year 2008/09. If no action is taken by the FBR, the association feels that revenues will drop further and all the good work done by the association would have been lost due to no action been taken by the FBR to suggestions being given by the association.
PSRMA strongly feels that SRO 678 needs to be revised to reduce sales tax on electricity consumed from Rs 6 to Rs 4.75 per unit of electricity consumed. Many re rolling mills are now closing down due to the high imposition of sales tax at 20 percent more than the normal rate during the whole financial year 2008/09.-PR