ISLAMABAD: The documented steel industry has asked the Federal Board of Revenue (FBR) to implement policy decision of sales tax exemption on sales/supplies of local scrap to generate additional revenue of Rs.40 billion to 50 billion in 2024-25 by curbing the menace of flying invoices in steel sector.
In an urgent letter addressed to FBR Chairman on Monday, the steel sector has raised the issue of delays in implementing budgetary decisions resulting in colossal revenue loss to national exchequer.
On behalf of Pakistan Association of Large Steel Producers, the industry informed a major chunk of steel industry has been closed in recent years and the remaining are forced to operate at minimum capacity. As a result, Pakistanis are losing jobs as massive layoffs are underway.
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In this situation, the government and especially FBR can give a healing touch through fast track decision making, simplification of outdated processes, and through timely implementation of already taken important decisions.
One such decision is the exemption of sales tax given in the budget (2024-25), on sale or supplies of local scrap.
The industry informed that the FBR has lost revenue of billions of rupees during the last two months as the concerned authorities are not implementing the decisions taken in the recent Budget to stop the practice of flying invoices in the local steel sector.
The federal budget 2024- 25, took this excellent decision which was proposed by the steel sector to net additional revenue of Rs.40 to 50 billion by curbing the menace of flying invoices in steel sector. But despite the lapse of two months of the current financial year, this has not been fully implemented.
As a result of the inordinate delay, the practice of flying invoices is still not under control. In numerous meetings held with top FBR officials immediately after the budget, the lacunas pointed out by the PALSP to FBR need immediate enforcement to ensure the desired recovery of revenue from the local steel sector. This situation has badly affected the high tax paying steel units due to un-healthy competition in the steel market as a result if inertia on the part of the concerned officials.
The PALSP has been continuously urging FBR and highlighting shortcomings during the last two months but in vain. The Operational and Policy side IRS, PRAL and IT wings of FBR need to work faster to implement the budgetary decision that are part of Act now, in letter and spirit, the documented industry added.
Copyright Business Recorder, 2024
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