FBR Lists 31 Steel Makers for Rs5 Tax Rate

The Federal Board of Revenue (FBR) has issued a revised list of 31 iron and steel manufacturers eligible for sales tax at a fixed rate of Rs5 per unit of electricity consumed, replacing its earlier notification issued on August 4 under the electricity-based taxation framework for the steel sector.

The revised list was notified through Sales Tax General Order (STGO) No. 16 of 2026, dated August 6, under the third proviso to Section 6(2) of the Sales Tax Act, 1990, read with SRO 1245(I)/2026 dated July 31. The order supersedes STGO No. 14 of 2026.

The fixed-rate regime covers registered melters, re-rollers and composite units that sourced more than 70% of their eligible steel scrap purchases from imports under specified HS codes, including purchases from EFS importers, during the previous 12 months. Their operations must also be integrated with the FBR's computerized system.

The Rs5-per-unit sales tax will be collected through electricity bills issued by the relevant distribution companies (DISCOs).

The FBR said eligibility was assessed using criteria under SRO 1245(I)/2026, including imported scrap usage, electricity consumption and imports under specified HS codes. The list may be amended periodically by the FBR or on recommendations from the relevant Commissioner Inland Revenue.

Field formations have also been authorised to independently verify whether manufacturers qualify for inclusion or removal from the list.

The revised order applies to all electricity connections of the listed manufacturers with effect from July 1, 2026, while the previous STGO No. 14 has been rescinded. All DISCOs have been directed to implement the revised rate.

The Pakistan Association of Large Steel Producers (PALSP) welcomed the move, saying the framework would encourage greater documentation within the steel industry.

PALSP Secretary General Syed Wajid Bukhari said only 31 manufacturers out of more than 200 steel producers nationwide had fulfilled the required documentation, scrap consumption and FBR integration conditions.

These manufacturers will pay Rs5 per unit of electricity, compared with Rs30 per unit for producers using locally sourced scrap and Rs35 per unit for electricity generated through captive or self-generation facilities.