ISLAMABAD/KARACHI: The steel industry on Tuesday reacted strongly over the decision of the government to withdraw Federal Excise Duty (FED) in former Fata districts and Pata areas as it will not only cause revenue losses but will place the industries in tribal areas at price advantage.

Meanwhile in a separate statement former chairman Pakistan Vegetable Manu­facturers Association (PVMA) Sheikh Umer Rehan demanded that the unfair concessions extended to big ghee investors of Fata and Pata in the budget 2021-22 should be withdrawn forthwith.

Mr Umer said Fata and Pata industry was already exempted from sales tax and income tax and providing more concessions to it would ruin the rest of the ghee units operating in other parts of the country.

Similarly, the Pakistan Association of Large Steel Producers has written to the Ministry of Industries and Finance Minister Shaukat Tarin saying the withdrawal of 17 per cent FED will make steel industries situated in the settled areas of the country noncompetitive.

“The current installed capacity in Fata has almost reached 1 million tonnes per annum whereas the consumption was not more than 180,000 tonnes per annum this clearly shows that many units have been set up to illegally use the tax incentive and provide tax-free finished goods outside the tribal areas to the mainland Pakistan,” the letter added.

The letter said that steel industry will have the disadvantage of up to 20pc compared to those in tribal areas, as 17pc sales tax and 3pc additional tax is levied for non-registered units in the country. The association has added that such a decision will have disastrous consequences for the economy.

Published in Dawn, June 16th, 2021