The Federal Board of Revenue (FBR) has introduced a new procedure for paying and adjusting additional sales tax on electricity used by steel manufacturers that run captive power plants or generate their own power. The move shapes how FBR steel sector tax refunds and related input adjustments are recorded for those firms under Sales Tax General Order No. 31 of 2026, issued on Thursday.
The order sits under the Sales Tax Act, 1990—Pakistan’s main sales tax law—read with S.R.O. 1245(I)/2026 dated 31 July 2026. Manufacturers covered by sub-clause (iv) of clause (a) of that S.R.O. must pay additional sales tax at the prescribed rate on the electricity units consumed for steel manufacturing in each tax period.
Payment, records and the fifth-day deadline
Registered manufacturers must keep proper records of electricity generated and consumed for manufacturing and declare those units in their sales tax returns. For each tax period they must use a special Payment Slip ID (PSID) challan made for steel makers on captive or self-generation, deposit the additional sales tax by the fifth day of the following month, and do so without issuing or generating an invoice.
How FBR steel sector tax refunds and STR-7 adjustments work
After deposit, the amount must be shown in the STR-7 return—the standard sales tax return form—for the period tied to that electricity use. It goes in Row 23c, labelled for additional sales tax on electricity supplied to steel melters and re-rollers, and an equivalent sum in Row 1a as input from that additional sales tax, for adjustment against output sales tax where the law allows. No figure may appear in those rows, and no adjustment is allowed, until the payment is verified through the matching Computerised Payment Receipt (CPR). In practice, that is how FBR steel sector tax refunds-style credits are unlocked for this levy: pay first, verify, then adjust.
Oversight and when the order applies
The concerned Commissioner Inland Revenue will check units consumed against the manufacturer’s records and the Thirteenth Schedule conditions under the Sales Tax Act, 1990. Chief Commissioners and Commissioners are to implement the order and monitor payments. Default, short payment or incorrect declaration of units will be handled under that Act and its rules. The FBR said the general order takes effect from 1 July 2026.
Timeline: what has happened so far
- 1 July 2026: Sales Tax General Order No. 31 of 2026 takes effect, according to the FBR.
- 31 July 2026: S.R.O. 1245(I)/2026, which the new procedure is read with, is dated.
- Thursday (order issued): FBR issues Sales Tax General Order No. 31 of 2026 setting the payment and STR-7 adjustment process for covered steel manufacturers.
Aasan alfaaz mein
FBR ne un steel factories ke liye naya tariqa diya hai jo apni bijli khud banati hain. Unhein har mahine ke bijli units par extra sales tax khas PSID se agle mahine ki 5 tareekh tak jama karna hoga. Wapas adjust tabhi hoga jab payment CPR se verify ho. Ghalti ya kami par Sales Tax Act ke mutabiq karwai ho sakti hai.
