ISLAMABAD, Oct 19 (Focus Pakistan) - FBR steel scrap valuation rules now give a narrow group of recycled-copper exporters a separate tax benchmark. The minimum taxable value of qualifying scrap now stands at just 55% of the reference price for steel bars.
The FBR SRO 1829(I)/2026 carries an Oct. 15 date. It amends SRO 2402(I)/2025, the Federal Board of Revenue’s December 2025 order fixing minimum sales-tax values for steel made in Pakistan.
THE BOTTOM RUNG
Market prices drive the 2025 formula. The Pakistan Bureau of Statistics checks what shops charge for steel bars in Lahore, Karachi, Peshawar, Quetta, Rawalpindi and Islamabad, and publishes the numbers monthly. FBR averages the six and knocks off 1,500 rupees a ton.
The new FBR steel scrap valuation places qualifying recycled-copper exporters below billets, ingots and ship plates in the existing tax valuation framework.
Other products sit below that figure:
- Billets: 85%
- Ingots and bala: 80%
- Ship plates: 75%
The new scrap category drops to 55%, the lowest percentage among the categories in the 2025 order.
In legal terms, the 2025 order calls these figures the minimum value of supply for sales tax. Cut that minimum and a qualifying sale may carry a smaller tax base. The sales tax rate does not move.
SELLERS, BUYERS, SCRAP
The new value covers re-meltable iron and steel scrap only. The seller must manufacture and export recycled copper under the Export Facilitation Scheme, 2021. The buyer must be a registered steel melter.
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Ordinary scrap dealers do not qualify. Neither does any other manufacturer that trades similar material. The notification also leaves the sales tax rate untouched and offers no blanket relief to the scrap trade.
The FBR steel scrap valuation applies only when eligible recycled-copper exporters supply re-meltable scrap directly to registered steel melters.
The logic follows the metal. A copper recycler strips wire and fittings out of mixed scrap, ships the copper abroad, and ends up holding iron and steel that local furnaces want. FBR now gives that leftover stream a valuation of its own.
The amendment lands three months after FBR rewrote how it collects sales tax from melters. Under SRO 1245(I)/2026, dated July 31, melters pay sales tax per unit of electricity they consume. Units using local scrap pay at 30 rupees a unit, and those running captive power pay at 35 rupees. Melters can adjust those payments against their output sales tax.
A rate of 5 rupees a unit applies to melters whose imported scrap exceeded 70% of their total scrap purchases over the previous 12 months, including scrap bought directly from importers under the Export Facilitation Scheme. FBR named qualifying manufacturers in an Aug. 4 order, then replaced that list with a new order two days later.
The Pakistan Association of Large Steel Producers said only 31 of more than 200 steel producers met the documentation, scrap and integration requirements.
The October change keeps the board’s focus on scrap and on who supplies it. It gives one more EFS-linked supply chain its own line in the tax code.
The notification gives no estimate of how much scrap will qualify. It also gives no estimate of the revenue impact, or of the effect on copper exporters’ margins and melters’ input costs. FBR has not named any company expected to benefit.
On paper, qualifying scrap now sits 45% under the steel-bar reference. What that saves in tax is another matter. FBR has published no volume figures and no revenue estimate, and any gain for copper exporters or melters will turn on actual prices, eligibility and the rules covering each sale.
