ISLAMABAD: The government has reduced sales tax rates for certain steel units operating in former FATA and PATA areas.
The revised rates apply to steel melters, composite units, and steel re-rollers. The move provides tax relief to eligible businesses operating in these territories.
Under the revised arrangement, steel melters and composite units using local remeltable scrap will pay sales tax at Rs. 20 per electricity unit consumed.
Steel re-rollers using imported or local raw materials will also pay sales tax at Rs. 20 per electricity unit. These units manufacture steel bars using different types of raw materials.
The FBR introduced the revised rates through a new notification. The Federal Board of Revenue issued S.R.O. 1664(1)/2026 on Friday.
The notification amends the earlier SRO 1245(1)/2026. It provides revised sales tax rates for eligible steel businesses in former FATA and PATA areas.
A lower rate of Rs. 5 per electricity unit will also apply to certain steel melters and composite units.
This rate will apply when the use of imported raw materials or remeltable steel scrap meets specific conditions.
The aggregate consumption must exceed 70 percent during the preceding 12 months. The relevant scrap must also be purchased directly from persons registered under the Export Facilitation Scheme.
Eligible steel melters and composite units can then qualify for the Rs. 5 per unit sales tax rate.
However, the revised Rs. 5 rate does not apply to steel re-rollers under the same condition. Steel re-rollers will continue paying Rs. 20 per electricity unit.
The FBR has also outlined rules for newly established businesses. Similar provisions apply to businesses that have resumed operations after remaining closed.
For such businesses, eligibility for the Rs. 5 rate will be assessed based on quarterly imports or purchases.
The revised arrangement continues a tax concession available under the Sales Tax Act, 1990.
The concession applies to businesses operating in the former FATA and PATA territories.
The government has introduced the revised rates to maintain the existing tax relief framework for eligible steel units.
The notification provides specific conditions that businesses must meet to qualify for the lower rate.
The FBR notification is expected to guide the application of sales tax rates for eligible steel businesses.
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Businesses will need to meet the prescribed requirements before claiming the reduced rate.
