Government of Pakistan

(Revenue Division)

Central Board of Revenue

[Sales Tax & Federal Excise Wing]

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 Islamabad, the 28^th July, 2006.

SALES TAX GENERAL ORDER NO. 03/2006

SUBJECT:     ISSUES RELATING TO STEEL SECTOR ---- INSTRUCTIONS REGARDING.

                        To streamline the sales tax regime applicable for the steel sector under SRO 678(I)/2006 dated 30.06.2006, the Central Board of Revenue, in exercise of the power conferred under section 55 of the Sales Tax Act, 1990, is pleased to issue the following instructions:

(i)                 Under SRO 678(I)/2006 dated 30.06.2006, fixed value addition per tonne of Rs. 3600/- and Rs. 2470/- has been prescribed for steel melters and Rs. 1800/- for the steel re-rollers. The net sales tax payable on account of the aforesaid value addition comes to be Rs. 540/- PMT and Rs. 370/- PMT for the steel melter and Rs. 270-/- PMT for the re-rollers. After the issuance of the aforesaid notification, steel re-rollers are issuing sales tax invoices showing Rs. 270/- PMT as the amount of sales tax chargeable from customers due to which the various industries using long steel products have agitated that the steel re-rollers are not passing on the input tax of Rs. 3300/- PMT leviable on imported/Pakistan Steel billets and consequently the downstream industry is entitled to input tax adjustment of Rs. 270/- PMT only, which has substantially increased their net liability as their end products are chargeable to sales tax @ 15%.

(ii)               Keeping in view the genuine hardship of the downstream industry, it is directed that the steel re-rollers shall issue sales tax invoices reflecting sales tax of Rs. 270/- PMT and Rs. 3300/- PMT to the buyers entitling the downstream industry to obtain adjustment of sales tax paid on billets.

(Wajid Ali)

Secretary (ST&FE-Budget)