Steel industry has requested the government to fix the value of re-rollable import scrap at $200 per ton because values of all other raw materials has also been fixed, it is learnt. In the 2011-12 budget recommendations, the steel sector has also asked the government that for furnaces established and running on bagasse, self generation, sales tax be charged assuming their production @ 75 percent of transformer capacity.
Some sugar mills have established steel furnaces/bar mills and are using electricity by burning bagasse, and non-payment of sales tax by them is rendering their competitors uncompetitive. This was proposed that sugar mills, which have captive power plants for electricity generation and are using it for steel processing, should have fixed tax on the basis of installed capacity of their melting furnace/bar mill size.
The steel industry has suggested for the Pakistan Steel Mills Association (PSMA) Pakistan Steel Re-Rolling Mills Association (PSRMA) that to avoid under-payment of Income Tax in terms of With-Holding Tax and Turnover Tax, similar to Sales Tax, the Income Tax to be charged @ Rs 0.70 per unit in the electricity bill for steel furnaces and re-rolling mill as full and final Income Tax liability.
In this manner the melters and the importers of re-rollable scrap will not pay income tax on import stage, with holding income tax on local purchase and 5 percent with holding tax adjustable on their electricity bill. This would result in a revenue increase from existing income tax of Rs 0.78 billion to Rs 3.28 billion (revenue increase by more than 400 percent). Pakistan Steel Mills Corp (PSMC), People Steel Mills, imported billets have higher sales tax invoice value than special procedure furnaces. This anomaly needs rectification. Sales Tax invoices of ingots/ billets to be increased from Rs 5, 526 to Rs 9, 900 for furnaces under special procedure.