A proposed 15 percent regulatory duty on hot-rolled steel imports in Pakistan is likely to get approved

Pakistan’s Federal Board of Revenue (FBR) has sanctioned a proposal of Ministry of Production and Industries to increase the regulatory duty on imports of hot-rolled steel products and pipes. However, the Ministry has also suggested a fix sales tax at the rate of Rs 5,600 per metric ton on the supply of billets and re-roll able scrap goods.

Ministry of Industry and Production claims that this initiative will provide a fair playground for the local industrialists and small industry.

FBR has not just supported the suggested increase in tax and regulatory duty but also proposed several other items to increase the duty. The Federal Board of Revenue has examined the proposals regarding regulatory duty and found that the imposed increase will generate additional revenue for the fiscal year 2015-2016.

A restructuring package of Rs18.5 billion has also been announced for the Pakistan Steel Mills. It was approved by the Economic Coordination Committee of the cabinet last year. Rs 1 billion of which was approved for the payment of salaries of employees which has already been paid last month.

Government has recently imposed Levy of 15 percent regulatory duty on steel products, bars, wire rods and billets at the rate of 15 percent however, cold-rolled steel has received an increase in duty at the rate of 5 percent.

Officials said that the local industry and Pakistan Steel is seriously affected by the low-cost imports from several countries. Cargo to Pakistan from UK, China, USA and several other countries is very cheap than the products of local industry.

Federal Board of Revenue has sent a copy of following proposal to Pakistan Customs Traffic department. Pakistan Steel Mills is the only local manufacturer of hot rolled steel products and has been facing a massive loss for the last decade.

The mill uses scrapped welded pipes, gas/water/oil pipes, oil and other liquid storage tanks, vessels, cargo containers, cargo ships, passenger and military ships, barges, launches & floating structures, fabricated sections and structures from industry, as raw material for manufacturing of hot-rolled steel products and cold rolled flat products.

Pakistan steel Mills has the capacity of meeting 72 percent of total steel needs of Pakistan, hence, the remaining 22 percent is still coming from other countries.