ISLAMABAD: The Federal Board of Revenue (FBR) has introduced mandatory electronic monitoring of production and dispatches in Pakistan’s iron and steel sector, requiring covered manufacturers to install and operationalise digital monitoring systems at every manufacturing facility and active production line by December 30, 2026.
Under Sales Tax General Order (STGO) No. 29 of 2026, issued under the Sales Tax Act, 1990, and relevant provisions of the Sales Tax Rules, 2006, the system will monitor steel production from billet and ingot identification to finished-product counting and final dispatch.
The order applies to registered manufacturers involved in melting ferrous scrap, producing billets and ingots, re-rolling semi-finished steel into bars and other products, and operating integrated melting and rolling facilities.
The monitoring framework comprises four stages: billet or ingot identification and counting; verification of product dimensions and sizes; counting and classification of finished steel products; and reconciliation of dispatch weights through integrated weighbridges.
Manufacturers must install industrial cameras, video analytics equipment, computing systems, sensors and software capable of recording production events, estimating weights and matching production data with actual dispatch figures.
The system must transmit production and dispatch information to the FBR’s Central Control Unit and generate alerts for discrepancies, unexpected stoppages, data gaps, equipment failures and suspected tampering.
All equipment must be calibrated and validated, while production parameters and system changes affecting reported output will be subject to prescribed approval and audit requirements.
The FBR has also directed manufacturers to procure, install and maintain monitoring systems through authorised vendors. Manufacturers must report system failures, damage or tampering to the relevant authorities within one hour.
The order requires manufacturers to facilitate inspections, maintain accurate production and dispatch records, and ensure that goods are not removed from their premises without being recorded through the monitoring system.
The initiative aims to strengthen production oversight, improve sales tax compliance and provide greater transparency in the steel supply chain.
