FBR expands list of iron/steel makers subject to Rs5/unit ST

ISLAMABAD - The Federal Board of Revenue (FBR) has extended the list of iron and steel producers subject to a sales tax (ST) of Rs5 per unit of electricity consumed, as per Sales Tax General Order No. 22 of 2026 - IR Operations Subject for amendment to STGO 16/2026. The FBR determined eligibility based on criteria outlined in SRO 1245(1)12026, for scrap consumption, electricity usage in steel production, and import of scrap under specific HS codes.

The FBR instructed field formations to potentially revise the list at their discretion or as recommended by the Commissioner Inland Revenue (CIR). The Board and formations can independently review a registered manufacturer's eligibility for inclusion or exclusion from the list, following the prescribed criteria. If any hardship arises, the matter can be addressed to the respective Commissioner Inland Revenue for consideration.

This STGO is in effect for all electricity connections of the aforementioned taxpayers with immediate effect. The FBR notified the names of four registered iron and steel manufacturers (melters, re-rollers, and composite units) whose scrap imports under certain HS codes, including purchases from the export facilitation scheme (EFS), exceeded seventy percent of their total scrap purchases in the past year and whose operations are integrated with the FBR's computerized system.

Consequently, these manufacturers will be taxed at the rate of Rs5 per unit of electricity consumed through their electricity bills issued by respective Discos.