The Federal Board of Revenue has decided to collect adjustable sales tax @ 5 percent on the value of imported goods or Rs 1600 per metric ton (PMT), whichever is higher, on the import of re-meltable iron and steel scrap. The FBR has amended Sales Tax Special Procedure Rules, 2007 through a SRO.1486 (I)/2012 issued here on Wednesday in this regard.
The notification says, the FBR has reduced sales tax on the steel-melting and steel re-rolling units, previously being collected on the basis of per unit electricity consumed by the steel manufactures. The sales tax has been reduced from Rs 7 to Rs 4 per unit of electricity.
The cost of doing business is very high for the steel sector. The power and gas load shedding has also adversely affected the manufacturing of the steel sector. As electricity is the major input of steel sector, its shortage has created serious problems for the entire industry. Therefore, the Board has reduced sales tax on the steel-melting and steel re-rolling units collected on the basis of per unit of electricity.
Following is the text of the notification issued here on Wednesday: In exercise of the powers conferred by sub-section (1) of section 71 of the Sales Tax Act, 1990, read with clauses (9) and (46) of section 2, sections 3 and 4, sub-section (2) of section 6, section 7, section 7A, clause (b) of sub-section (1) of section 8, clause (a) of sub-section (2) of section 13, sub-sections (2A) and (3) of section 22, section 23 and section 60 thereof, the Federal Government is pleased to direct that the following further amendments shall be made in the Sales Tax Special Procedure Rules, 2007, namely:
In the aforesaid Rules,
(1) in rule 58H,-
(a) in sub-rule (1), for the word "seven" the word "four" shall be substituted;
(b) in sub-rule (2), in the proviso,
(i) for the word "seven" the word "four" shall be substituted; and
(ii) for full stop, at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely;
"Provided further that adjustable Sales Tax @ 5 percent on the value of imported goods as determined under clause (d) of sub-section (46) of section 2 of the Sales Tax Act, 1990 or Rs 1600 PMT whichever is higher shall be collected on import of re-meltable iron and steel scrap.";
(c) in sub-rule (7), after the word "adjustment" the expression "except as provided in second proviso to sub-rule(2)" shall be inserted.
(2) in rule 58Ha,-
(a) in sub-rule (2),-
(i) after the word "melters" the words "and re-rolling mills" shall be inserted:
(ii) for the figure "1663", the figure "950" shall be substituted; and
(iii) for full stop, at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-
"Provided that adjustment shall be allowed as provided in second proviso to sub-rule (2) of rule 58H," and
(b) in sub-rule (3), for the words "Re-rolling" and "re-rolling", occurring in the first and fourth line respectively, the words "Steel melters and re-rolling" and "steel melters and re-rolling" respectively shall be substituted; and
(3) in rule 581,-
(a) in sub-rule (2), for the words "seven thousand three hundred and forty seven" the words "four thousand five hundred and sixty seven" shall be substituted; and
(b) in sub-rule (5), for the words "nine hundred and ten" the words "five hundred and twenty" shall be substituted.