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Wednesday, January 15, 2025  
15 Rajab 1446  

Federal govt likely to extend regulatory duties on flat steel products

Industry urged imposition of 10% RD on Galvalume steel coils and sheets
Representational image. Reuters
Representational image. Reuters

The federal government is expected to extend the currently imposed 5% and 10% Regulatory Duty (RD) on flat steel products for an additional three months, until March 31, 2025. This move aims to protect the local steel industry, Business Recorder reported.

The National Tariff Policy 2019-24 requires that all proposals related to tariffs be examined at the Tariff Policy Centre and subsequently approved by the Tariff Policy Board (TPB) before submission to the Cabinet or Parliament.

In the Finance Act 2024, regulatory duties were imposed on several products, including flat iron and steel, with a sunset clause set to expire on December 31, 2024. Following budget discussions for FY 2024-25, the industry has made multiple requests for an extension of these duties.

During its 61st meeting on December 26, 2024, the TPB analyzed these requests and recommended the extension of the current 5% and 10% RD on flat steel products (covering 36 tariff lines) until March 31, 2025. The recommendation also stated that existing RD rates would revert to their original positions of 0% and 5% on April 1, 2025.

In a summary to the Economic Coordination Committee (ECC), the Commerce Ministry emphasized that under Sub-Section 3 of Section 18 of the Customs Act, 1969, the federal government has the authority to make decisions regarding regulatory duties.

During the TPB meeting, it was noted that International Steel Limited requested the continuation of the 5% and 10% regulatory duties on various finished flat steel products until June 30, 2025. The industry also urged the imposition of a 10% RD on Galvalume steel coils and sheets to counteract anti-dumping duties currently levied on galvanized steel.

The Joint Secretary (Tariff Policy) explained the existing tariff structure on flat steel products, which includes customs duties ranging from 11% to 20%, additional customs duties from 2% to 6%, and regulatory duties from 5% to 10%, along with anti-dumping duties that can reach up to 40.47%.

Official documents revealed that the import value of flat steel products increased by only 4% during the period from July to November 2024 compared to the previous financial year. Conversely, imports of Galvalume steel have decreased by 13% in value and 8% in quantity, contradicting claims of increased imports.

The Joint Secretary further noted that due to the nominal increase in flat steel products, neither the continuation nor an increase in regulatory duties is recommended, as it could negatively affect downstream industries. Additionally, under the International Monetary Fund (IMF) program, the Ministry of Commerce is committed to not raising and reducing the trade-weighted average tariff during the program’s duration.

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