Pakistani government unveiled its annual budget for FY 2020-21 in the National Assembly yesterday evening (12th Jun’20), as the industry continues to battle the impact of covid-19 pandemic and the resultant lockdown, on the national economy
In a slight relief to steelmakers in the country, who rely on active imports of shredded scrap for steelmaking, the additional custom duty of 2%, which was earlier levied on imports of Shredded and bundled scrap, has been proposed to be removed . However, HMS scrap imports, which attracted 3% customs and 2% additional customs duty, has been kept unchanged.
Notably, this narrows the gap between the landed cost of imported Shredded and HMS scrap even more, thus making shredded scrap imports even more viable for Pakistani mills, who anyway had been preferring it more than HMS imports since last one year.
No change in tariffs on billets and steel bars was observed.
Additionally, other positive measures include, income tax at ports being reduced from 5.5% to 2% for Manufacturers, while reduction in regulatory duty of several industrial input materials, in order to reduce the input costs of manufacturing.
“With regards to Steel sector, the Budget is positive one, which was required at this time, and steel mills are now expecting a total of around $12-15/t cost reduction on an overall basis” shared a Karachi based steelmaker.
From a general point of view, no new taxes were introduced, in order to give relief to the consumers, while steps for reducing inflation rates were also announced.
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