ISLAMABAD: The Federal Board of Revenue has issued procedure for adjustment of sales tax by steel melters paid at import stage on the specified categories of remeltable iron and steel scrap with effect from July 1, 2018.
The FBR, in supersession of Sales Tax General Order No. 119 of 2017 dated 2nd August, 2017, and in exercise of the power conferred under sub-rule (2C) of rule 58H of the Sales Tax Special Procedures Rules, 2007, issued the following procedure: –
- The adjustment procedure under sub-rule (2C) of rule 58H of the Sales Tax Special Procedure Rules, 2007 shall be applicable only to such steel melting units (hereinafter referred to as “entitled steel melters”) which are paying sales tax through their electricity bills in the manner prescribed in sub-rule (2) of rule 58H ibid. Steel mills operated by sugar mills or other persons using self-generated electricity under rule 58H of the said Rules and steel melting and rerolling units which have opted to pay sales tax on ad valorem basis under rule 58Ma ibid shall not be entitled to this adjustment procedure.
- Adjustment shall be admissible/allowed only on import of re-meltable iron and steel scrap under PCT Headings 7204.3000,7204.4100 and 7204.4990 (hereinafter referred to as “specified scrap categories”). The adjustment shall be allowed only to the extent of sales tax, paid at import stage on the specified scrap categories allowing 5% wastage.
- Pakistan Steel Melters Association shall provide to the Board a list of entitled steel melters, as noted above, having single electricity meter including composite units having both remelting and re-rolling facility. The list shall include the particulars such as NTNISTRN, electricity consumer number, name of DISCO, composite or otherwise, etc. Subsequent additions to the list shall be provided by the Association in the same manner. Such lists shall be referred to concerned RTOs/LTUs for post-verification by the Board to identify the nature of the unit i.e. whether composite or stand alone steel melters.
- An entitled steel melter whose name is available in the list referred in para-3 above, using his e-FBR Login-ID shall select the input GDs of specified scrap categories against which adjustment is sought indicating the amount of adjustment against each.
- The system shall print an adjustment note indicating sales tax credit available for adjustment. The note shall be presented to relevant DISCO which shall verify the note from e-FBR portal. It shall then allow adjustment/deduction from the sales tax charged through the electricity bill for a particular month against adjustment note.
- DISCOS shall maintain account of adjustment allowed against a particular adjustment note and the balance shall be carried forward to the subsequent month for adjustment in similar manner.
- When the credit balance available in the adjustment note is exhausted or near exhaustion, the entitled steel melters may obtain another adjustment note against subsequent imports in the manner indicated above.
- Copies of adjustment notes shall be made available to respective RTOs/LTUs in the system for monitoring purpose. 9. FBR’s computerized system shall maintain proper record of GDs against which adjustment has been allowed.