FBR prescribes minimum output of steel products for sales tax payment

FBR prescribes minimum output of steel products for sales tax payment

ISLAMABAD: The Federal Board of Revenue (FBR) has prescribed minimum production of steel products for payment of sales tax under Thirteenth Schedule of Sales Tax Act, 1990.

According to Finance Act, 2021 an amendment has been made to Section 3 of the Sales Tax Act, 1990 in respect of goods, specified in the Thirteenth Schedule, the minimum production for a month shall be determined on the basis of a single or more inputs as consumed in the production process as per criterion specified in the Thirteenth Schedule and if minimum production so determined exceeds the actual supplies for the month, such minimum production shall be treated as quantity supplied during the month and the liability to pay tax shall be discharged accordingly.

In the Thirteenth Schedule following has been inserted:

Minimum production of steel products.—

The minimum production for steel products shall be determined as per criterion specified against each in the Table below:

S. No.ProductProduction criteria
(1)(2)(3)
1.Steel billets and ingotsOne metric ton per 700 kwh of electricity consumed
2.Steel bars and other re-rolled long profiles of steelOne metric ton per 110 kwh of electricity consumed
3.Ship plates and other re-rollable scrap85% of the weight of the vessel imported for breaking”; and

Procedure and conditions:—

(i) both actual and minimum production and the local supplies shall be declared in the monthly return. In case, the minimum production exceeds actual supplies for the month, the liability to pay tax shall be discharged on the basis of minimum production:

Provided that in case, in a subsequent month, the actual supplies exceed the minimum production, the registered person shall be entitled to get adjustment of excess tax on account of excess of minimum production over actual supplies:

Provided further that in a full year, as per financial year of the company or registered person, or period starting from July to June of next year, in other cases, the tax actually paid shall not be less than the liability determined on the basis of minimum production for that year and in case of excess payment no refund shall be admissible:

Provided also that in case of ship-breaking, the liability against minimum production, or actual supplies, whichever is higher, shall be deposited on monthly basis on proportionate basis depending upon the time required to break the vessel;

(ii) the payment of tax on ship plates in aforesaid manner does not absolve ship breakers of any tax liability in respect of items other than ship plates obtained by ship-breaking;

(iii) the melters and re-rollers employing self-generated power shall install a tamperproof meter for measuring their consumption. Such meter shall be duly locked in room with keys in the custody of a nominee of the Commissioner Inland Revenue having jurisdiction.

The officers Inland Revenue having jurisdiction shall have full access to such meter;

(iv) the minimum production of industrial units employing both distributed power and self-generated power shall be determined on the basis of total electricity consumption.

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