ISLAMABAD: The Federal Board of Revenue (FBR) has issued a new procedure for steel manufacturers on captive power to pay and adjust additional sales tax on electricity generated and consumed in-house.
The procedure was notified through Sales Tax General Order No. 31 of 2026, issued on Thursday. It introduces an “Additional Sales Tax Challan” and a computerised payment receipt (CPR) for the affected manufacturers. The order is issued under the Sales Tax Act, 1990, read with S.R.O. 1245(1)/2026 dated July 31, 2026, and covers manufacturers falling under sub-clause (iv) of clause (a) of the S.R.O.
Manufacturers must pay additional sales tax at the prescribed rate on the electricity units consumed for steel production in each tax period. They are required to maintain records of electricity generated and consumed, and to declare the units consumed in their sales tax return.
For every tax period, a registered person must generate a special PSID challan, available exclusively to such manufacturers, and deposit the amount by the 5th day of the following month. No invoice is to be issued or generated for this payment.
The verified deposit must be shown in Row 23c of the STR-7 return, titled “Additional Sales Tax on electricity supplied to Steel Melters and Re-Rollers.” An equal amount is reflected in Row 1a for adjustment against output sales tax. The FBR said nothing may be entered in either row unless the tax has been deposited through the special challan and verified through the CPR.
The Commissioner Inland Revenue concerned will verify the declared units against the taxpayer’s records, in line with the Sales Tax Act and the Thirteenth Schedule. Manufacturers must also declare their production and supplies as required by law.
Chief Commissioners and Commissioners Inland Revenue have been directed to implement the order and monitor payments. Any default, short payment or incorrect declaration of units will be dealt with under the relevant provisions of the Sales Tax Act and its rules.
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