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Pakistan’s Engineering Development Board (EDB) and National Tariff Commission (NTC) have initiated discussion with the steel industry on tariff structure. 


On Jan 23, EDB issued a letter to various steel associations stating that EDB, under the Competitiveness/Efficiency Improvement & Export enhancement Exercise 2020-21, would initiate the discussion with visits.


Tariff rationalisation came in the wake of a liquidity crunch within the steel industry. 


The industry currently has to pay around Rs11,000/mt extra, inclusive of 17pc GST on imported scrap, a 10pc cash GST payment, apart from tax returns to the Federal Board of Revenue (FBR)


Also on the table for a rationalisation are customs duties, sales tax, regulatory duties, export challenges and customs procedures (SROs). 


After the announcement of the 2019-2020 budget last year, several issues were shaped amid abolition of sales tax procedures


The government withdrew 3pc value addition sales tax imposed on 32 imported consumable and durable products including steel scrap due to which steel manufacturers claim to have faced losses.


The move to rationalise tarriffs will boost steel industry by reducing the cost of production and increasing competitiveness. 


The Pakistan Association of Large Steel Producers (PALSP) has requested that the government body have steel melting and rolling scrap at a fair valuation, as the import trade price of shredded scrap is fixed at 25-35pc higher than overall scrap prices in the international market. 


It is proposed that imported steel scrap be traded at daily variable price.


Re-rollable material is subject to 7pc duty plus taxes, at the time of import, while billets are subjected to 28pc duty plus taxes.  The steel makers want this disparity reduced by reducing regulatory duty, customs duty or additional custom duties on re-rollable material by 21pc.

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