ISLAMABAD: The Federal Board of Revenue (FBR) has introduced a new procedure for the payment and adjustment of additional sales tax on electricity consumed by steel manufacturers using captive power plants or self-generated electricity.
Under Sales Tax General Order No. 31 of 2026, issued on Thursday, the FBR has outlined requirements under the Sales Tax Act, 1990, read with S.R.O. 1245(I)/2026 dated July 31, 2026. Covered steel manufacturers must pay additional sales tax at the prescribed rate based on the electricity units consumed for steel production during each tax period.
The FBR has directed registered manufacturers to maintain proper records of electricity generation and consumption and declare the relevant units in their sales tax returns. Payments must be deposited through a special Payment Slip ID (PSID) challan by the fifth day of the following month, without issuing or generating an invoice.
The additional sales tax payment must be reported in the relevant STR-7 sales tax return fields, allowing an equivalent amount to be adjusted against output sales tax where permitted by law. The adjustment will only be allowed after the payment has been deposited and verified through the corresponding Computerized Payment Receipt (CPR).
The concerned Inland Revenue authorities will verify electricity consumption records and monitor compliance. Any default, short payment or incorrect declaration will be dealt with under the applicable provisions of the Sales Tax Act, 1990. The FBR said the general order would take effect from July 1, 2026.
