The Federal Board of Revenue (FBR) has ordered steel manufacturers across Pakistan to install digital monitoring systems at all factories and active production lines by December 30, 2026, to track output and shipments in real time.

The directive was issued through Sales Tax General Order No. 29 of 2026 on Wednesday. It covers registered steel melters, re-rollers and composite units involved in manufacturing and processing steel products.

Under the new system, the FBR will digitally monitor steel production from the initial stages to the dispatch of finished goods. The system will count billets and ingots, verify product sizes, classify finished products and record shipment weights.

It will also capture production times, manufacturing line details, estimated output weights, vehicle registration numbers and the actual weight of goods leaving factories. The information will be sent electronically to the FBR’s Central Control Unit, allowing the department to compare production estimates with recorded dispatches and flag unexplained differences.

Steel manufacturers will have to install industrial cameras, sensors, video analytics equipment, integrated weighbridges and other required hardware and software. The system must support automated counting, weight estimation, alerts and safeguards against tampering.

The FBR has authorised ISSM Labelling Solutions and Obsidian to provide monitoring systems for the iron and steel sector. Manufacturers must procure, install and maintain the equipment through authorised vendors under the applicable sales tax rules.

The order prohibits manufacturers from removing or supplying covered goods without recording production and, where applicable, completing dispatch monitoring and reconciliation through the approved system. Manual registers, private camera systems and standalone weighbridge records will not qualify as alternatives.

Manufacturers must report equipment failures, damage, suspected tampering or inactive production lines to the FBR, its Central Control Unit and the relevant Commissioner Inland Revenue within one hour.

They must also notify the FBR at least 30 days before making changes to products, production lines, weighbridges or dispatch arrangements that could affect the monitoring system.

The FBR has directed its field officers to identify operational steel units, arrange site inspections, oversee system installation and testing, and examine unexplained differences between production and dispatch figures.

The collected data may also be compared with sales tax returns, invoices, inventory records, electricity consumption and weighbridge information.

Violations, including failure to install or operate the system, bypassing monitoring controls, concealing production lines or dispatch points, and moving goods without the required monitoring, may lead to action under the Sales Tax Act, 1990, and relevant rules, subject to applicable legal procedures.

The order has taken immediate effect, while steel manufacturers have until December 30, 2026, to install and operationalise the prescribed system.