Pakistan News

FBR urged to levy unified sales tax rate on steelmakers

FBR urged  to levy unified sales tax rate on steelmakers

ISLAMABAD: The Com­peti­tion Commission of Pakistan (CCP) has issued a policy note to the Federal Board of Revenue (FBR) to eliminate discrimination meted out to some steel industry players by imposing different sales tax rates and has recommended that this discrimination be removed by levying same sales tax rate on all players.

The CCP took notice of a complaint filed by Madina Enterprises Limited, which is using alternative energy, and alleged that the mechanism of charging sales tax by the FBR was discriminatory vis-à-vis units operating on electricity supplied by Discos.

Looking into the matter, the commission sought views of the all stakeholders.

It was found that Madina Steel was charged General Sales Tax (GST) at 17 per cent of the value of production simply on account of producing its own electricity through the use of renewable energy sources, such as bagasse and rice husk, while those units acquiring electricity from Discos were charged GST at Rs9 per unit of electricity consumed.

The CCP recommended that all units in the steel sector be charged the sales tax on the same rates rather than differentiating on the source of power they use for production.

Published in Dawn, June 22nd, 2016

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