Key Takeaways
- Steel manufacturers have until December 30, 2026, to install a digital monitoring system.
- The system will track production and dispatches, recording details such as vehicle registration numbers and weights.
- Failure to comply may result in action under the Sales Tax Act, 1990.
The Federal Board of Revenue (FBR) has mandated that all registered steel manufacturers in Pakistan must install and activate a digital monitoring system by December 30, 2026. This directive, detailed in Sales Tax General Order No. 29 of 2026, aims to enhance transparency and accountability in the steel industry.
The system will monitor production at various stages, including the counting of billets and ingots, verification of product sizes, and weighing of outgoing shipments. It will record production dates, times, product dimensions, estimated weights, vehicle registration numbers, and the gross, tare, and net weights of dispatched goods.
Steel manufacturers will need to install industrial cameras, sensors, video analytics equipment, integrated weighbridges, and other required hardware and software. The system must support automated counting, alerts, and controls to detect tampering. ISSM Labelling Solutions and Obsidian have been named as authorised vendors for the iron and steel sector.
Manufacturers must arrange installation and maintenance through vendors approved under the relevant sales tax rules. The system must be operational for the removal and supply of covered goods, and manual records, privately installed cameras, and standalone weighbridge entries will not be accepted as substitutes.
The FBR has directed its field formations to identify operational steel units, coordinate site surveys, supervise installation and testing, and investigate unexplained differences in production and dispatch data. The monitoring information may also be compared with tax returns, invoices, stock records, electricity consumption, and weighbridge data.
Manufacturers must report system failures, equipment damage, tampering, or an inactive production line to the FBR, its Central Control Unit, and the relevant Commissioner Inland Revenue within one hour. They must also provide 30 days’ advance notice of changes to products, production lines, weighbridges, or dispatch processes that could affect the monitoring system.
Failure to install or operate the system, bypassing monitoring controls, concealing production lines or dispatch points, and removing goods without the required monitoring may invite action under the Sales Tax Act, 1990, and relevant rules. The order has taken immediate effect.
The FBR has named ISSM Labelling Solutions and Obsidian as authorised vendors for the iron and steel sector. Manufacturers must arrange installation and maintenance through vendors approved under the relevant sales tax rules.
