LAHORE: The Lahore Chamber of Commerce and Industry has urged the government to focus on the rehabilitation of steel melting industry that is in deep trouble because of General Sales Tax on electricity bills and various other issues.
While talking to a group of Steel Melters Association, president of the Lahore Chamber of Commerce and Industry Sheikh Muhammad Arshad, Senior Vice President Almas Hyder and Vice President Nasir Saeed said that the General Sales Tax on the electricity bills of Steel Melters should be reduced to four rupees from existing nine rupees which is very high and one of the biggest reasons of high input cost of the Steel Melting Industry.
The delegation informed the LCCI office-bearers that the steel melting sector has a production capacity of 7.5 million tonnes which has been reduced to 3.5 million tonnes, mainly because of import of finished and semi-finished steel products. The local industry produces iron billets, girder, angle and other products thus generating a substantial amount of revenue to the national exchequer.
Yet, they agreed that the Federal Board of Revenue in 2007 had taken all stakeholders including steel melters, steel re-rollers, ship breakers, and Pakistan Steel Mills into confidence and evolved the Special Procedure 2007 which it resolved that the general sales tax at the rate of Rs 4.75 per unit would be levied on electricity bills, which was later enhanced to Rs 9 per unit in the federal budget 2015-16. At that time, the raw material-shredded steel scrap was $350 to $360 per tonne that has been declined to $190 to $200 per tonne.
According to the Pakistan Steel Melters Association, the steel melting furnaces utilize electricity on very large scale as its raw material. Though it is the largest revenue generating sector in Pakistan till to date but in deep trouble due to unfavorable policies.
They also urged the government to withdraw adjustable sales tax at import stage as it blocks the working capital for a long time span. They also demanded withdrawal of 15% regulatory duty on steel scrap which is also one of the basic raw materials of the steel melting industry.
The LCCI office-bearers said that concerned authorities should keep in view the ground realities and solve the issues of steel melting industry at the earliest.
