Increased ST rate on steel products to generate additional revenue: expert

The Federal Board of Revenue has increased sales tax rate on steel products to generate additional revenue in the upcoming fiscal year. Arshad Shehzad, a tax expert, while commenting on the special procedure for payment of sales tax on re-rollers, steel melters and ship breakers has said that procedure for payment of sales tax to steel melters and ship breakers is being redrafted to introduce increased rate on different sort of production and steel products.
Sales tax rate on the basis of electricity consumption for production of steel billets, ingots and MS products increased to Rs 8/- per unit of electricity consumed from Rs 6/- per unit of electricity consumed. Sales tax on ship breakers has increased to Rs 6700/- per MT from Rs 4848/- per MT. Besides increase in rate ship breakers are now required to furnish post dated cheques against their sales tax liability.
Steel melters and Re-rollers operating on self generation basis now also need prior permission from Chief Commissioner. Procedure for sales tax payment on the basis of gas bill for steel melters is redefined with change of formula: Sales tax payable = [HM3 (or hundred cubic meter) x Rs 1900] less sales tax paid on gas bill:
Procedure for sales tax payment for re-rolling mills operating on self-generated electricity monthly basis is redefined as:- Sales tax payable = mill size (in inches) x Rs 51,822 Amount of sales tax on the sales tax invoices issued to different buyers has been increased as per following details:
1. Value of sales tax on invoices issued by steel melters to re rollers increased from Rs 5526/- PMT to Rs 7349/- PMT.
2. Value of sales tax on invoices issued by steel re rollers using ingots or billets of steel melters increased from Rs 5526/- PMT to Rs 7349/- PMT.
3. Value of sales tax on invoices issued by re rollers using billets of Pakistan Steel Mill or Heavy Mechanical complex or Peoples Steel or imported billets to downstream industry increased from Rs 7380/- PMT to Rs 9651/- PMT.
4. Value of sales tax on invoices issued by Re-rollers using ship-plates and re-rollable scrap increased from Rs 5526/- PMT to Rs 7349/- PMT.
5. Value of sales tax on invoices issued by Re-rollers to unregistered person increased from Rs 780/- PMT to Rs 1040/- PMT
6. Value of sales tax on invoices issued by persons supplying imported MS product to registered person increased from Rs 7380/- PMT to Rs 9650/- PMT.
7. Value of sales tax on invoices issued by persons supplying imported MS product to unregistered person increased from Rs 780/- PMT to Rs 1040/- PMT Fixed Value of Steel Product for purpose of assessment of sales tax is increased as per following table:

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S.NO. DESCRIPTION                     HS CODE          PREVIOUS           INCREASED

                                                         VALUE              VALUE

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1     Billets supplied by Pakistan   Respective     Rs  40,800/- PMT   Rs  54,264/- PMT

      Steel Mills, Heavy             heading

      Mechanical Complex and

      Peoples Steel Mills

2     Imported billets               Respective     US$ 400 PMT        US$ 585 PMT

                                      heading

3     Re-rollable scrap supplied     Respective     Rs  30,300/- PMT   Rs  42,188/- PMT

      by ship breakers                heading

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