Islamabad, September 3, 2024 – The steel industry has urged the Federal Board of Revenue (FBR) to promptly implement the budgetary decision to exempt sales tax on the sale or supply of local scrap.
According to the industry, this measure could generate an additional revenue of Rs. 40 to 50 billion in the fiscal year 2024-25 by curbing the widespread practice of flying invoices within the steel sector.
In a letter to the FBR Chairman, the steel sector expressed its concerns over delays in the implementation of this budgetary decision. The industry emphasized that these delays have led to substantial revenue losses for the national exchequer. They also pointed out that a significant portion of the steel sector has been forced to shut down operations due to various challenges, resulting in job losses and production being limited to minimal capacity.
The industry highlighted the crucial role the government, particularly the FBR, could play in supporting the sector by expediting decision-making processes, modernizing outdated procedures, and swiftly implementing announced measures. Among these measures is the sales tax exemption on local scrap, which was introduced in the budget for the fiscal year 2024-25 but has yet to be executed.
The steel sector stated that billions of rupees in revenue have been lost due to the non-implementation of this exemption, allowing the practice of flying invoices to continue unchecked. This fraudulent activity not only undermines the legitimate steel industry but also hampers effective revenue collection.
The steel industry has urged the FBR to take immediate action to address the gaps in the current budgetary decision and ensure its swift implementation. By cracking down on the use of flying invoices, the government could significantly increase revenue from the steel sector and foster a more competitive environment for compliant businesses.
The industry warned that further delays in implementing the sales tax exemption are causing severe harm to the documented steel sector, mainly due to the unfair competition from those engaging in illegal practices. The steel sector has called on the FBR to make this issue a priority and work diligently towards the implementation of the budgetary decision, ensuring a fair and transparent business environment for all stakeholders involved.
