Pakistan: PSRMA appeals against proposed 5% customs duty on re-rollable scrap, warns of SME mill closures

• PSRMA demands rollback of duty to maintain fair and rational tariff structure
• Duty disparity favours large players, risking monopolisation in steel sector

The Pakistan Steel Re-Rolling Mills Association (PSRMA) has raised serious concerns over the proposed 5% customs duty on re-rollable scrap in the 2025-26 federal budget, calling it discriminatory and a direct threat to small and medium-sized re-rolling mills across the country.

“Your inaction today may result in thousands of closures tomorrow,” warns PSRMA, urging all stakeholders to act in defence of the SME steel sector.

PSRMA has urged Prime Minister Shehbaz Sharif and key officials to intervene and protect the SME steel sector.

Under the new tariff structure, customs duty on re-rollable scrap (HS Code 7204.4910) is set to increase from 0% to 5%, while the duty on melting scrap (HS Code 7204.4990) is proposed to be reduced from 3% to 0%. Meanwhile, billets–classified as a semi-finished product–will see a duty cut from 11% to 5%.

PSRMA argues that the hike violates principles of justice, tariff rationalisation, and a level playing field.

Key Risks and Outcomes:

• Closure of small and medium mills, job losses, and expansion of the informal sector.
• Increased misuse of melting scrap loopholes and risk of smuggling.
• Monopolisation and MS price hikes due to unfair treatment of re-rollable scrap as semi-finished products.

PSRMA’s urgent demands:

• Revoke the proposed 5% duty on re-rollable scrap and restore the 100% mutilation facility for oversized imports.
• Restrict sales tax inputs on re-rollable scrap to re-rolling units and rationalise ACDs and RDs.
• Ensure SME stakeholder inclusion in future policy decisions.