FBR Launches New Tax Rules for Self-Sufficient Steel Businesses

In practice, the Federal Board of Revenue (FBR) has issued a new procedure for the payment and adjustment of extra sales tax on electricity consumed by steel manufacturers operating on captive power or self-generation.

Key points

• The General Order will take effect from July 1, 2026, the FBR remarked.
• Registered persons must declare their production and supplies in their sales tax returns in accordance with the Sales Tax Act, 1990, and the rules created thereunder.
• The FBR issued Sales Tax General Order No.
• Under the new procedure, steel manufacturers operating on captive power or self-generation of electricity and falling under sub-clause (iv) of clause (a) of S.R.O.
• For each tax period, registered persons must generate a special PSID challan/CPR created available exclusively for steel manufacturers operating on captive power or self-generation.

For context, the FBR issued Sales Tax General Order No. 31 of 2026 – IR Operations on Thursday, prescribing the procedure under the Sales Tax Act, 1990, read with S.R.O. 1245(1)/2026 dated July 31, 2026.

Under the new procedure, 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 must pay extra sales tax at the prescribed rate based on the electricity units consumed for steel manufacturing during the relevant tax period. Steel Industry Cannot Hide From FBR Anymore. Record-Keeping and Payment Procedure.

In practice, the FBR has directed registered persons to maintain proper records of electricity generated and consumed for manufacturing purposes and declare the electricity units consumed during the relevant tax period in their sales tax returns.

For each tax period, registered persons must generate a special PSID challan/CPR created available exclusively for steel manufacturers operating on captive power or self-generation. The extra sales tax payable under S.R.O. 1245(1)/2026 must be determined based on electricity units consumed during the tax period and deposited by the 5th day of the after month.

In practice, the payment must be created without the issuance or generation of an invoice. Sales Tax Adjustment Through STR-7.

Notably, the extra sales tax deposited through the special PSID challan and verified through the corresponding computerized payment receipt (CPR) must be reflected in 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 consumption relates. Textile Industry Slams FBR Over 40-Hour Customs Delay.

Meanwhile, an equivalent amount must additionally be reflected in STR-7 Row 1a, "Input from Additional Sales Tax on Electricity Supplied to Steel Melters and Re-Rollers, " for adjustment against output sales tax in accordance with the law.

Notably, the FBR clarified that no amount may be reflected in STR-7 Row 23c or allowed as an adjustment through Row 1a unless the corresponding extra sales tax has been deposited through the special PSID challan and verified through the CPR.

Notably, the concerned Commissioner Inland Revenue will verify the electricity units consumed during the relevant tax period based on the records maintained by the registered person and in accordance with the applicable provisions of the Sales Tax Act, 1990, and the conditions of the Thirteenth Schedule.

Notably, the concerned Chief Commissioner Inland Revenue or Commissioner Inland Revenue will ensure implementation of the General Order and monitor the payment of extra sales tax by registered persons covered under the procedure.

Any default, short payment, or incorrect declaration of electricity units will be dealt with under the relevant provisions of the Sales Tax Act, 1990, and the rules created thereunder. The General Order will take effect from July 1, 2026, the FBR remarked. Stay Connected with ProPakistani.

Obtain the latest business news, market insights, and economic updates wherever you prefer. Follow on Google Discover. Follow on Google News Join WhatsApp. See more ProPakistani stories in Google Search and Top Stories.

In short, FBR Launches New Tax Rules for Self is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.