ISLAMABAD: The steel industry on Monday expressed concerns over the measures proposed in the federal budget 2019-20 terming it disastrous for the sector.

The Pakistan Association of Large Steel Producers (PALSP) in a letter to the Anomaly Committee, constituted by the Federal Board of Revenue (FBR), said that in the recent past large quantity of re-rollable scrap found its way into the country due to faulty import duty structure.

The association urged the government to increase customs and regulatory duties on re-rollable scrap under the PCT Codes 7204-4910. It deplored that the government has further reduced duties on this intermediary good that is a substitute of the billet.

The letter added that certain measures introduced in the budget 2019-20 would further add woes of the industry.

Instead of facilitating and compensating the industry through remedial measures, the government has introduced steps which would lead to revenue losses to government and ultimately cause closure of steel units in the settled areas of the country.

The PALSP claimed that in the last six months or so the local steel industry has faced severe crisis and many units were closed, adding that some leading players, which were showing record performance and profits, one year back were currently cutting production.

The letter highlights that a year ago many steel units were planning to make huge investments for expansions and striving for exports of steel products. Unless the government takes concrete measures to rescue the local industry, this situation will result in rapid de-industrialisation and closure of the local country, the body claimed.

The PALSA letter said the government needed to remove customs, additional customs duties as well as regulatory duty on the raw material.

It added that the relief provided by the government with the removal of 3 per cent customs duty was too small and it is not going to provide any meaningful relief to the local steel industry. The most pressing issue for the industry is government’s measure of allowing duty free raw material /scrap for the industrial units located in Fata and Pata, it claimed.

PALSP has said that this is going to result in closure of steel units in the settled areas and will result in huge revenue loss for the government.

Published in Dawn, June 25th, 2019