Pakistani Federal Cabinet Cuts Duty on Scrap

The Pakistani Federal Cabinet has decided immediate reduction in customs duty on re-rollable scrap from 25 percent to 10 percent to facilitate the local manufacturers of M.S. bars and steel rolled products.

The Federal Cabinet has decided 15 percent reduction in customs duty. The previous rate of 25 percent was being agitated by the local manufacturers for being very high as compared to the duty rate on other raw materials like M.S. scrap, ships for scrapping and billets.

The Cabinet also decided to eliminate the current levy of 3 percent withholding tax on the import of ships for scrapping and 6 percent withholding tax on the import of other raw materials and intermediary products.

It also decided not to charge any withholding tax on the import of raw materials by Pakistan Steel Mills and other industrial manufacturers against exemption certificate to facilitate its import without withholding tax. However, income of these importers from the finished items shall remain subject to tax as per existing rules and regulations.

Reviewing the situation arising from the recent sharp increase in steel prices both in international and domestic markets, Prime Minister Mir Zafarullah Khan Jamali, directed the Ministry of Industries and Production and the Ministry of Finance to closely monitor the situation to ensure availability of both cement and steel as the demand for these had increased sharply in the recent months on account of a healthy upturn in the construction and housing sectors.