ISLAMABAD, Sept 1: Federal Board of Revenue (FBR) has worked out a mechanism for payment of sales tax by steel melters and re-rolling mills operating on self-generation basis.

The system has been streamlined through a Sales Tax General Order No 5 issued on Saturday.

The new system was evolved in consultation with all Pakistan Steel Melters Association and Pakistan Steel Re-Rolling Mills Association.

According to the new system, steel melters producing electricity with the help of gas generators shall calculate their sales tax liability on the basis of the gas bill for the relevant tax period.

Re-rolling mills operating on self-generated electricity shall discharge their tax liability on the basis of monthly sales tax payable through sales tax return. The registered persons shall deduct sales tax paid on diesel consumed from the payable amount as above provided the taxpayer holds valid sales tax invoice.

In case a rolling mill operating on self-generation basis remains closed for 7 or more days consecutively during a tax period, the registered person shall inform on telephone/fax to the respective collector of sales tax and the representative of the association prior to the closure of the mill.

A survey report shall accordingly be prepared by the monitoring committee comprising of the sales tax officer nominated by the concerned collector of sales tax and representatives of Pakistan Steel Re-Rolling Mills Association.

The tax liability of the said mill shall be determined on the basis of the agreed formula for the number of days the mill remains in operation during the month.