LAHORE: Pakistan Steel Melters Association (PSMA) has said that the government has been suffering Rs 975.5 million per month loss due to closure of 50 melting units alone in Lahore and Gujranwala.
Talking the issues of the steel melting industry faced by the due to unfriendly government polices with the member of Lahore Economic Journalist Association, Chairman of the Steel Melters Association Mian Saeed said that standard consumption of a 5 to 12 ton steel melting furnace is one million electricity units per month.
There are 50 units closed in Lahore and Gujranwala which means 50 million electricity units are not being consumed due to closure of these furnaces.
The government has been charging Rs 4 per unit sales tax from furnaces, Rs 0.88 income tax per unit and per unit cost of electricity to them other than these taxes is Rs 14.63.
Thus, on account of sales tax Rs 200 loss incurred, Rs 40 million on account of income tax and Rs 731.5 million on account of not selling 50 million units of electricity, Mian Saeed added.
Talking about tax issues, Mian Saeed said that the industry has been paying 4 per cent withholding tax of the scarp sellers. He pointed out that the scarp sellers and dealers are not registered with the Federal Board of Revenue (FBR). The FBR has shifted their inefficiency on the industry and deducting 4 per cent withholding tax from them on the steel melted from the local steel scarp. The industry is depending 35 to 40 per cent on locally produced steel scarp due to high prices of imported steel scarp in the international market which make them uncompetitive. He asked for reducing the withholding tax to one per cent as this step will be helpful for the industry and also easily performed their national responsibility of tax generation.
Other than this the government has also been collecting one per cent turnover tax which was previously half per cent. The federal government has increased the turnover tax in the last budget for the ongoing fiscal year. Now the industry demanded the government to lower it down to 0.25 per cent from current one percent as this tax was also bore by them. The industry is in deep crisis and unable to pay one percent turnover tax to the government, Mian Saeed added.
The Association Chairman pointed out that the sugar industry has also installed furnaces and paying no tax to the government on the steel they melted. They asked for capacity tax on the furnaces installed by the sugar mills in Punjab.