The Federal Board of Revenue (FBR) has introduced a new Sales Tax General Order for Pakistan's steel industry, imposing a sales tax of Rs5 per unit of electricity on selected companies as part of efforts to improve tax collection and documentation in the sector.
The FBR has also released the list of companies that fall within the scope of the new tax regime.
The FBR announced the new Sales Tax General Order to strengthen tax compliance in the steel sector and make the taxation system more efficient.
According to the order, selected steel industry companies will be charged a sales tax of Rs5 on every unit of electricity consumed.
Electricity bills to include new sales tax
Under the new mechanism, the relevant power distribution companies (DISCOs) will collect the additional Rs5 per unit sales tax through the electricity bills of the affected companies.
The move is aimed at streamlining tax collection by integrating the levy with electricity consumption.
Which companies will be affected?
The new tax will apply to selected steel melters, rerollers and composite units that meet specific criteria laid down by the FBR.
According to the order, the levy specifically targets companies that fulfill prescribed conditions related to the import of scrap, bringing them within the tax ambit.
Along with the Sales Tax General Order, the FBR has issued a list of companies that will be subject to the new taxation mechanism.
Only the companies included in the notified list will be required to pay the additional sales tax through their electricity bills.
Order takes effect under Aug 4 notification
The FBR said the Sales Tax General Order will be implemented in accordance with the notification issued on August 4, 2026.
The board stated that the primary objective of the measure is to improve the efficiency, transparency and enforcement of the tax system in Pakistan's steel industry.
