The Federal Board of Revenue (FBR) has rolled out a fresh process for steel manufacturers that run captive power plants or generate their own electricity, requiring payment and adjustment of extra sales tax on the power they use.
Issued on Thursday, Sales Tax General Order No. 31 of 2026 follows the Sales Tax Act, 1990 and S.R.O. 1245(I)/2026 dated July 31, 2026. It obliges covered steel makers to pay additional sales tax at the prescribed rate for the electricity units consumed in steel production each tax period.
Registered manufacturers must keep accurate records of electricity generation and consumption, and report the relevant units in their sales tax returns. Payments are to be made via a special Payment Slip ID (PSID) challan by the fifth day of the following month, without needing an invoice.
The extra tax must be entered in the appropriate STR-7 sales tax return fields, permitting an equivalent amount to be offset against output sales tax where the law allows. This adjustment is possible only after the payment is deposited and confirmed through the Computerized Payment Receipt (CPR).
Inland Revenue officials will check electricity consumption records and enforce compliance. Any default, short payment or incorrect filing will be addressed under the Sales Tax Act, 1990. The FBR noted the order becomes effective on July 1, 2026.
