ISLAMABAD, July 9: The Federal Board of Revenue (FBR) has notified special procedures for payment of sales tax by steel melters, re-rollers and shipbreakers. These rules were notified through a sales tax notification SRO678 of 2007 released here on Monday by amending the sales tax special procedures.

The FBR has also notified values of steel products for the purpose of sales tax. The value for billets supplied by Pakistan Steel Mills and Peoples Steel Mills at Rs32,300 per ton, imported billets at $500 per ton, imported re-rollable scrap at $400 per ton, re-rollable scrap supplied by ship breakers at Rs24,000 per ton and ingots and billets supplied by other steel melters at Rs27,335 per ton.

According to the procedures, every steel-melter, steel re-roller and shipbreaker, if not already registered, shall obtain registration in the manner prescribed in Chapter I of the Sales Tax Rules, 2007.

It has been notified that every steel-melter, steel re-roller and composite unit of steel melting and re-rolling (having a single electricity meter), shall pay sales tax at the rate of Rs4.75 per unit of electricity consumed for the production of steel billets, ingots and mild steel (MS) products which will be considered as their final discharge of sales tax liability.

Payment of tax shall be made through electricity bills along with electricity charges. While in case of default in payment of sales tax by the due date mentioned on the electricity bill, besides other legal action by the concerned Sales Tax Collectorate, the concerned electric supply company shall disconnect the electricity connection of the unit.

Shipbreakers shall pay sales tax at the rate of Rs3,500 per ton of re-rollable scrap supplied by them. The quantity of re-rollable scrap shall constitute 70.5 per cent of the total LDT of the ship imported for breaking.

The shipbreakers shall clear their sales tax liabilities in respect of ships weighing up to 10,000 LDT within four months, while in case of ships weighing more than 10,000 LDT, within eight months from the date of filing of Goods Declaration.

The sales tax liability shall be discharged by the shipbreaker either on completion of clearance of goods obtained from breaking of vessel or within the maximum time period allowed as aforesaid, whichever is earlier.

Pakistan Steel Mills, Karachi and Peoples Steel Mills, Karachi shall pay sales tax on their products. Steel melters and re-rollers, except Pakistan Steel Mills and Peoples Steel Mills, paying sales tax on fixed rates through electricity bills shall not be entitled to any input tax adjustment.

It has also been notified that sales tax invoices shall be issued by steel melters to re-rollers showing sales tax amount of Rs4,100 per ton. For downstream steel industry sales tax invoices shall be issued by steel re-rollers using ingots/billets of steel melters showing sales tax amount of Rs4,717 per ton.

According to the procedures, re-rollers using billets of Pakistan Steel Mills or imported billets shall issue sales tax invoices to downstream industry showing sales tax of Rs4,060 per ton.

For buyers other than downstream industry, steel re-rollers shall issue invoices showing sales tax of Rs617 per ton. Sales tax invoices in respect of supplies of billets shall be issued by Pakistan Steel Mills and Peoples Steel Mills showing sales tax of Rs4,845 per ton.

Persons supplying imported MS products shall issue invoices showing sales tax of Rs5,460 per ton. Shipbreakers shall issue invoices of re-rollable scrap supplied by them showing sales tax of Rs3,600 per ton. The re-meltable scrap supplied by shipbreakers shall be zero-rated.

The All Pakistan Steel Melters’ Association and All Pakistan Steel Re-rollers’ Association shall be responsible to ensure that the steel melters and re-rollers pay sales tax in the manner specified in these rules.

In case of non-compliance, the association shall actively assist the concerned collectorate for enforcement and recovery of sales tax due along with default surcharge calculated thereon, besides any other proceedings that may be initiated against the defaulting steel-melter or steel re-roller under the Act.