FBR adds 5 more steel units to Rs. 5 per unit electricity tax list

ISLAMABAD: The Federal Board of Revenue (FBR) has expanded its list of iron and steel manufacturers subject to a sales tax of Rs5 per unit of electricity consumed, adding five more companies to the list with immediate effect.

The development was notified through Sales Tax General Order (STGO) No. 22 of 2026, issued on September 5, 2026. The latest order amends STGO 16/2026, issued on August 6, 2026, and applies to all electricity connections held by the newly listed taxpayers.

The five companies added to the list are Rasheed Steel, Batala Steel Industries, Royal Steel, Platinum Steel Mill (Private) Limited, and KBS Steel Furnace.

The FBR issued the order under Section 6 of the Sales Tax Act, 1990, read with SRO 1245(I)/2026.

According to the tax authority, the manufacturers were included after being assessed against prescribed criteria related to scrap consumption, electricity usage for steel production and imports of scrap under specified HS codes.

Under the revised arrangement, the Rs5-per-unit sales tax will apply to electricity consumed through all connections of the listed taxpayers. The relevant distribution companies (DISCOs) have been instructed to implement the notified rates.

The measure covers various categories of steel-sector businesses, including iron and steel manufacturers, melters, re-rollers and composite units.

The FBR has also retained the authority to revise the list. The board or the concerned Commissioner Inland Revenue may add or remove manufacturers depending on whether they meet the prescribed eligibility criteria.

The expansion comes as the tax authorities seek to strengthen tax collection and improve compliance in the steel sector. The electricity-based mechanism provides the FBR with a way to link tax collection to industrial electricity consumption while bringing more manufacturers within the documented tax framework.

Tax experts have advised affected businesses to carefully review their tax position and determine whether they fall within the criteria set out in the notification. They said understanding the legal basis and eligibility requirements could help companies avoid disputes, unexpected liabilities or compliance problems.

The FBR has also provided a mechanism for manufacturers facing genuine hardship. Such businesses may approach their concerned Commissioner Inland Revenue for appropriate consideration.

With the latest additions, the FBR has signalled that the list will remain subject to periodic review rather than being treated as a fixed set of taxpayers.

For the newly included steel units, however, the revised Rs5-per-unit electricity tax takes effect immediately, making compliance a priority for their electricity connections.