The Federal Board of Revenue (FBR) has imposed a Rs5 per unit sales tax on electricity consumption for 100 manufacturers in Pakistan’s iron and steel sector, a move that is likely to increase the prices of steel products.
According to a new Sales Tax General Order (STGO) issued by the FBR, the tax will apply to selected steel manufacturers, melters, re-rollers, and composite units. The relevant power distribution companies (DISCOs) will collect the additional Rs5 per unit sales tax through electricity bills.
The new levy applies to companies that meet specific eligibility criteria related to the import of steel scrap under the applicable tax framework.
The FBR said the measure is aimed at improving tax administration and enhancing compliance within the steel industry. The order will come into effect under a notification issued on August 4, 2026.
Industry stakeholders expect the additional tax burden to increase production costs, raising concerns that steel prices may rise in the domestic market.
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