FBR expands list of steel manufacturers subject to Rs5 per unit sales tax

The Federal Board of Revenue (FBR) has expanded the list of iron and steel manufacturers subject to sales tax of Rs5 per unit of electricity consumed, with the levy to be collected through electricity bills issued by relevant power distribution companies (DISCOs).

 

The tax authority issued Sales Tax General Order (STGO) No. 22 of 2026, amending the earlier STGO 16/2026 and adding four registered manufacturers from the iron and steel sector.

 

The newly listed entities include manufacturers operating as melters, re-rollers and composite units that meet the prescribed eligibility criteria concerning scrap consumption, electricity usage and imports.

 

According to the FBR, the eligibility of manufacturers has been determined under SRO 1245(1)/2026, particularly based on their use of scrap and electricity in steel production and imports of scrap under specified HS codes.

 

The four manufacturers included in the latest list imported scrap under HS codes 7204.3000, 7204.4100, 7204.4990 and 7204.4940, with such imports accounting for more than 70% of their total scrap purchases during the preceding 12 months. Their operations are also integrated with the FBR's computerized system.

 

The FBR directed its field formations to ensure that the Rs5-per-unit sales tax is applied to all electricity connections of the listed taxpayers with immediate effect.

 

The Board said the list may be revised periodically, either on its own initiative or based on recommendations from the relevant Commissioner Inland Revenue (CIR).

 

The FBR and its field offices may also independently review the eligibility of registered manufacturers for inclusion in or removal from the list under the prescribed criteria.

 

In cases where taxpayers face difficulties, the matter can be referred to the concerned Commissioner Inland Revenue for consideration.