FBR notifies 15pc regulatory duty on various steel products

KARACHI: The Federal Board of Revenue (FBR) on Wednesday imposed regulatory duty of up to 15 percent on import of various steel products amid criticism from the steel industry.
To impose the regulatory duty, the FBR issued SRO 18 (I)/2015 to amend the previous notification SRO 568 (I)/2014 issued on June 26, 2014.
Steel products on which 15 percent regulatory duty has been imposed included semi-finished products of iron or non-alloy steel; bars and rods, hot-rolled, in irregularly wound coils, of iron or non-alloy steel; other bars and rods of iron or non-alloy steel, not further worked than forged, hot-rolled, hot-drawn or hot-extruded, but including those twisted after rolling; other bars and rods of iron or non-alloy steel; bars and rods, hot-rolled, in irregularly wound coils, of stainless steel; other bars and rods of stainless steel; angles, shapes and sections of stainless steel; wire of stainless steel; other alloy steel in ingots or other primary forms; semi-finished products of other alloy steel; high speed steel; silico-manganese steel; other bars and rods of other alloy steel; angles, shapes and sections, of other alloy steel; hollow drill bars and rods, of alloy or non-alloy steel; and wire of other alloy steel.
The regulatory duty at five percent imposed on items included flat-rolled products of iron or non-alloy steel, of a width of 600mm or more, cold-rolled (cold-reduced), not clad, plated or coated; flat-rolled products of iron or non- alloy steel, of a width of 600mm or more, clad, plated or coated.
The business community had already opposed the imposition of the regulatory duty. The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in a statement released two days ago had criticised the imposition, stating such goods are raw material to produce bars like shredded steel scrap and steel plates.
Steel melters and ship-breakers were already enjoying subsidies of more than Rs20 billion, as their sales tax was under the slab of 10 percent and they were also availing of the benefits of reduction in the international prices to the tune of 25 percent of shredded steel scrap, Mian Muhammad Adrees, president of the FPCCI, said.
The Pakistan Steel Re-rolling Mills Association also criticized the imposition of 15 percent regulatory duty on import of billets and termed it unjustified.
The association said around 30 percent of its member rolling mills do not have their own billet manufacturing facility and completely depend on imports.. Some 3.5 million tonne billets are manufactured in Pakistan per annum against the total need of 4.5 million tones.
It said many of the billets manufacturers utilise the billets in producing value-added products at their own factory premises and do not manufacture the raw material to be sold to others.
“The levy of 15 percent regulatory duty, therefore, would cause hardship to these independent re-rollers,” it said.
The association said the government did not take them into confidence before slapping the duty.
At present, value addition from the scrap to the local billet is currently Rs30,000/tonne whereas the international norm is around $120 (Rs12,240)/tonne.