ISLAMABAD: The large steel producers Tuesday conveyed to the Senate Standing Committee on Finance that the decision of withdrawal of federal excise duty (FED) from steel units of tribal areas would have revenue implications of Rs50-60 billion on the documented sector.
In a communication to the Chairman Senate Standing Committee on Finance here on Tuesday, large steel producers informed that the removal of FED from Fata/Pata may also result in closure of local steel industry.
The decision of withdrawal of FED from Fata/Pata steel units announced in the federal budget is going to be most damaging for the local steel industry. Also, it will result in revenue loss of Rs50-60 billion to the national exchequer.
The large steel producers have appealed to the government to reverse the measure of withdrawal of FED from Fata/Pata steel units as this is going to hit the tax paying and documented long steel sector in a big way.
The measure will make the fully documented industry unviable and which may even shut down eventually.
Before the budget, the sales tax for Fata/Pata steel scrap and all raw materials was free of sales tax and other taxes. However, FED was applicable on finished products throughout Pakistan including Fata/Pata. This was done to prevent leakage of Rs50 to 60 billion in taxes.
Under the new finance bill, FED on steel has been abolished by which the steel units in the Fata/Pata will not pay any taxes even though it is now part of the Pakistan.
The industry has requested that the FED in sales tax (VAT) mode should be levied from the port stage to the finished products.
The large steel producers had sought the support from the Senate Standing Committee on Finance for saving the local steel industry from disaster, it added.
Copyright Business Recorder, 2021
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