KARACHI: The Federal Board of Revenue (FBR) has announced procedure of adjustment for steel melters pertaining to the sales tax paid at the import stage on specified categories of re-meltable iron and steel scrap.
According to Secretary IR – ST&FE, Raza Ashfaq Sheikh, the adjustment procedure under sub-rule (2C) of rule 58H of the Sales Tax Special Procedure Rules, 2007 shall be applicable only to such steel melting units which are paying sales tax through their electricity bills in the manner prescribed in sub-rule (2) of the rule 58H ibid.
The steel mills operated by sugar mills or other persons using self-generated electricity under rule 58H of the said rules and steel melting and re-rolling units which have opted to pay sales tax on ad valorem basis under rule 58Ma ibid shall not be entitled to this adjustment procedure, he added.
The adjustment shall be admissible/ allowed only on import if re-meltable iron and steel scrap falling under PCT headings 7204.3000, 7204.4100 and 7204.4990. The adjustment shall be allowed only to the extent of sales tax, paid at import stage on the specified scrap categories and which has actually been consumed in the production of steel products. The said consumption shall be determined on the basis of consumption of 800 electricity units for the production of one metric ton of ingots/billets.
The commissioner inland revenue, after satisfying himself as to correctness of the adjustment claim and keeping in view the imported quantities of specified scrap categories shall issue and Adjustment Certificate for the amount of sales tax paid against the GDs, within seven days of submission of a complete application clearly specifying the amount of sales tax to be adjusted from the sales tax charged through the electricity bill for a particular month on the basis of actual consumption units of electricity, he further said.
A copy of Adjustment Certificate shall be endorsed to the concerned electric power distribution company. The concerned DISCO or K-Electric, as the case may be, on receipt such Adjustment Certificate, shall reduce the amount of sales tax specified therein from the amount of sales tax charged in the electricity bill for the same month to the extent of the amount specified in the referred certificate.
The entitled units shall maintain record of Adjustment Certificate obtained and shall furnish quarterly statements to the Commissioner Inland Revenue having jurisdiction showing the monthly adjustments made in the electricity bills on the basis of such Adjustment Certificate vis-à-vis production for those months.
