Electricity consumed by steel manufacturers: FBR issues new procedure for payment of additional sales tax

ISLAMABAD: The Federal Board of Revenue (FBR) has issued a new procedure for payment and adjustment of additional sales tax on electricity consumed by steel manufacturers operating on captive power or self-generation.

In this regard, the FBR on Thursday issued a Sales Tax General Order No. 31 of 2026 to notify the “Additional Sales Tax Challan” and computerized payment receipt for the steel manufacturers operating on captive power or self-generation of electricity.

In exercise of the powers conferred under the Sales Tax Act, 1990, read with S.R.O. 1245(1)/2026 dated 31st July, 2026, the FBR has prescribed procedure for payment and adjustment of additional sales tax by steel manufacturers operating on captive power or self-generation of electricity.

The steel manufacturers operating on captive power or self-generation of electricity and falling under sub-clause (iv) of clause (a) of S.R.O. 1245(1)/2026 shall pay additional sales tax at the rate prescribed therein on the basis of electricity units consumed for manufacture of steel during the relevant tax period.

The registered person shall maintain proper record of electricity generated and consumed for manufacturing purposes and shall declare the electricity units consumed during the relevant tax period in the sales tax return, FBR said.

The registered person shall, in respect of each tax period, generate a special PSID challan/CPR made available exclusively for steel manufacturers operating on captive power or self-generation of electricity, for payment of additional sales tax payable under S.R.O. 1245(1)/2026, determined on the basis of electricity units consumed during that tax period, and shall deposit the amount so determined by the 5th day of the following month, without issuance or generation of any invoice.

The amount of additional sales tax deposited under clause (c) and verified through the corresponding computerized payment receipt (CPR) shall be reflected STR-7 Row 23c, “Additional Sales Tax on electricity supplied to Steel Melters and Re-Rollers”, of the sales tax return for the tax period to which the electricity units consumed relate, and an equivalent amount shall be reflected in STR-7 Row-la, “Input from Additional Sales Tax on electricity supplied to Steel Melters and Re-Rollers”, of the sales tax return for adjustment against output sales tax in accordance with the law.

No amount shall be reflected in STR-7 Row 23c or allowed as adjustment through STR-7 Row la unless the corresponding additional sales tax has been deposited through the special PSID challan and verified through CPR.

The Commissioner Inland Revenue concerned shall verify the electricity units consumed during the relevant tax period on the basis of the record maintained by the registered person and in accordance with the applicable provisions of the Sales Tax Act, 1990 and the conditions of Thirteenth Schedule thereto.

The registered person shall declare its production and supplies in the sales tax return in accordance with the provisions of the Sales Tax Act, 1990 and the rules made thereunder.

The concerned Chief Commissioner Inland Revenue/Commissioner Inland Revenue shall ensure implementation of this General Order and monitor payment of additional sales tax by the registered persons covered hereunder. Any default, short payment or incorrect declaration of electricity units shall be dealt with in accordance with the relevant provisions of the Sales Tax Act, 1990 and the rules made thereunder.

This General Order shall take effect from July 1, 2026, the FBR added.

Copyright Business Recorder, 2026