Certain iron & steel items: Input tax adjustment on purchases restricted

ISLAMABAD: The Federal Board of Revenue (FBR) has restricted input tax adjustment on purchase of certain iron and steel items by manufacturers of oil and ghee and steel melters/re-rollers.

In this regard, the FBR has issued a Sales Tax General Order #26 of 2026 (Operations) on Thursday.

According to the notification, whereas, section 8(1)(a) of the Act restricts the adjustment of input on goods or services used or to be used for any purpose other than for taxable supplies made or to be made. Section 8(1)(f) and (i) of the Act provide that tax credit shall not be admissible on the goods or services not related to the taxable supplies made by the taxpayer.

The items included semi-finished products of iron or non-alloy steel; flat-rolled products of iron or non-alloy steel, stainless steel in ingots or other primary forms; semi-finished products of stainless steel. bars and rods, hot- rolled and wire of other alloy steel.

Accordingly, FBR, restricted input tax adjustment on purchase of certain HS Codes in the cases of manufacturers of oil and ghee and steel melters /Re-Rollers through of STGO 12 of 2022 dated 07.04.2022. Annexure-II of the STGO ibid particularly relates to Steel Melters/ Re-Rollers.

Whereas, the attached list of HS Codes is further added to Annex-II to the STGO 12 of 2022 dated 07.04.2022 being fmished/semi-finished goods and are not related to Steel Melters, FBR maintained.

Any hardship caused may be brought to the notice of the Commissioner-IR concerned. This STGO shall become applicable with immediate effect, the FBR added.

Copyright Business Recorder, 2026