FBR slaps fixed GST on steel products

ISLAMABAD: The Federal Board of Revenue (FBR) on Monday notified fixed GST (general sales tax) of Rs153,000/metric ton on steel bars and other long profiles.

The FBR, as per its notification, imposed Rs131,000/metric tonne on steel billets, Rs126,000/metric ton on Steel ingots/bala, Rs126,000/metric tonne on ship plates, and Rs/119,000/metric tonne on other re-rollable iron, and steel scrap.

The government had abolished Special Procedures for the steel sector through Finance Bill 2019-20 and slapped the standard GST rate of 17 percent. The government has jacked up GST rate from Rs142,000/metric tonne to Rs153,000/metric tonne on steel bars and formal notification was also issued to this effect.

Meanwhile, Pakistan Association of Large Steel Producers (PALSP) wrote a letter to Chairman FBR and drew his attention towards the menace of under-invoicing, thriving unabated being a source of high illegal gratification.

“Professional trade criminals have become well-organised and strong because of delays in implementation of effective counter measures by the federal government,” the PALSP said in its letter.

“The foreign exchange looted through under-invoicing in export is parked outside Pakistan and utilised in mis-declaration of customs value on imports to evade the national revenue.” The steelmakers said under-invoicing or trade-based money laundering was being exploited by organised criminal groups and professional money launderers to facilitate myriad types of financial flows.

“We would like to outline the disaster as follows: creation of hostile trading environment, deindustrialisation, loss of foreign exchange, etc,” the PALSP wrote in its letter. The association said through Finance Bill 2020-2021, the federal government had allowed Pakistan Customs to incorporate values from internationally acclaimed publications, periodicals, bulletins, or official websites of manufacturers or indenters.

“On the request of PALSP, the Directorate General of Customs Valuation issued Valuation Rulings linking Customs Value with LMB (London Metal Bulletin) for export of copper and import of metal scrap having copper content,” it said.

According to PALSP, the prices published in LMB (now Fastmarkets) are market-reflective assessing both the buy and sell side of transactions purely unbiased. “The association of Customs Values of copper/copper scrap with the prices published in LMB through Valuation Rulings has provided a transparent platform for uniform assessment for all importers regardless of their category or sector.”

It added that the LMB data had also helped Pakistan Customs to discover the actual composition of metal scrap and helped in effective determination of Customs Value. Trade data showed a significant improvement in the collection of revenue and foreign exchange on exports, the steelmakers said.

“We most humbly request you for immediate measures to associate Customs Value with international prices through LMB on import and export of all metals and metal scraps.”

Pakistan imports over 6 million tons of just metal Scrap every year and even a small variation can cause loss of billions to national exchequer. “We most humbly request for an appointment/meeting at the earliest to allow representatives from PALSP to demonstrate the issue in detail,” the steelmakers said. —