The Federal Board of Revenue (FBR) has notified 99 registered iron and steel manufacturers that will pay sales tax at the rate of Rs. 5 per unit of electricity consumed through their power bills.

The measure has been introduced under the Sales Tax Act, 1990, through SRO 1245(I)/2026 issued on July 31, 2026. It applies to registered steel melters, rerollers, and composite units whose operations are integrated with the FBR’s computerized system.

According to the FBR notification, the listed manufacturers imported more than 70% of their scrap requirements during the previous 12 months under relevant Harmonized System (HS) codes. The calculation also includes scrap purchased directly from importers operating under the Export Facilitation Scheme.

The additional sales tax will be collected by electricity distribution companies through monthly electricity bills based on the units consumed by these manufacturers.

FBR stated that the list of eligible manufacturers may be updated periodically by the board or on recommendations from relevant Commissioners Inland Revenue. The tax authority and its field formations will also retain the authority to review whether a manufacturer qualifies for inclusion or removal from the list.

Manufacturers facing difficulties under the new collection mechanism may approach their concerned Commissioner Inland Revenue for review and possible relief, according to the notification.