Islamabad, January 18, 2024 – The Federal Board of Revenue (FBR) has issued valuation of locally produced steel products for collection of sales tax.
In an effort to enhance transparency and ensure a fair assessment, the FBR released SRO 985(I)/2021, specifying the valuation for various steel products produced within the country.
The valuation, set by the revenue body, is intended for the purpose of sales tax collection on an ad valorem basis. This means that the tax will be levied based on the value of the goods, ensuring a proportional and equitable taxation system.
The FBR, in line with Section 3 of the Sales Tax Act, 1990, has fixed the values of different steel products, each assigned a specific rate applicable for the calculation of sales tax. These rates have been established to reflect the current market conditions and the intrinsic value of the products.
As outlined in SRO 985(I)/2021, the following values have been set by the FBR:
1. Steel bars and other long profiles: Rs140,000 per metric ton
2. Steel billets: Rs125,000 per metric ton
3. Steel ingots/bala: Rs120,000 per metric ton
4. Ship plates: Rs120,000 per metric ton
5. Other re-rollable iron and steel scrap: Rs118,000 per metric ton
These values will serve as the basis for the calculation of sales tax on the respective steel products, offering clarity and consistency in the taxation process. Adhering to these specified valuations will help streamline tax assessments, providing a standardized approach to sales tax collection within the steel industry.
The FBR has emphasized that if the actual value of the supplied goods is higher than the fixed values, the tax will be assessed based on the higher transaction value. This ensures that the taxation system remains adaptive to market dynamics, reflecting the true economic worth of the goods being traded.
The move by the FBR is seen as a positive step towards creating a more predictable and transparent tax regime. By establishing clear valuations for locally produced steel products, the FBR aims to facilitate accurate tax assessments, reduce ambiguity, and promote compliance within the steel industry.
This initiative is part of the broader efforts by the FBR to modernize and enhance the efficiency of the taxation system in Pakistan. As industries evolve and economic landscapes change, such measures play a crucial role in ensuring that the tax regime remains relevant, fair, and conducive to economic growth.
In conclusion, the FBR’s issuance of valuations for locally produced steel products is a proactive measure to bring greater clarity and consistency to the sales tax collection process. By providing specific values for different steel items, the FBR aims to simplify tax assessments and foster a business-friendly environment within the steel sector.