Govt Decides To Remove Duties On Import Of Silicon Steel Sheets
Government’s decision to abolish import taxes on silicon steel sheets follows ban on traditional fans and light bulbs starting on July 1, due to their higher energy consumption.
To encourage the production of energy-efficient home appliances, the government has decided to abolish import taxes on silicon steel sheets, which are used to make electric fans, motors, washing machines, and transformers.
The government’s decision to abolish import taxes on silicon steel sheets follows a ban on traditional fans and light bulbs beginning on July 1, 2023, due to their higher energy consumption.
Documents readily available state that a summary of the amendment to SRO No. 565 has been transferred to the Ministry of Commerce after careful consideration and consultation with pertinent stakeholders (MoC).
The MoC will submit a case to the National Tariff Policy for revision of SRO No. 565(I), 2006, and seek approval from the federal cabinet through the Economic Coordination Committee in order to expand the exemptions to all manufacturers and vendors of electrical appliances. A committee that the prime minister established previously discussed the problems facing the bulb and fan industries.
Meetings were held with the Pakistan Standard and Quality Control Authority, the Ministry of Culture, the Engineering Development Board, the National Energy Efficiency and Conservation Authority (NEECA), and the Ministry of Science and Technology (MoST).
According to information, Non-Grain Oriented Electrical Steel Sheet (NGOESS) is used by the fan industry to make fan stators and rotors, and it is labelled under PCT headings 7225.1900 and 7226.1900. The NGOESS is subject to 2% Additional Custom Duty (ACD) and 5% Regulatory Duty (RD), whereas electrical steel sheet is subject to 5% Custom Duty under the current SRO.
Since more than 20,000 metric tonnes of these two products were imported through March 7, 2023, of the current fiscal year, paying a duty of Rs 180 million, documents indicate that the financial impact of the duty exemptions for these two products will likely exceed Rs 200 million.
Approximately 41 million fans are installed in homes and other buildings nationwide, according to sources. In order to ensure the installation of at least one new, highly energy-efficient fan in the premises of every consumer under an installment payment plan for its cost, the ministry of energy will work with power companies (DISCOs).
According to the approved plan, consumers may pay more than Rs 12,000 for a new fan. However, the price will be increased in installments on a monthly basis for electricity.
The minimum energy performance standard (MEPS) has been announced by the National Energy Efficiency and Conservation Authority (NEECA) for the manufacturing of only those fans with a power factor of less than 80 watts.
In the meantime, PSQCA has informed SRO that it intends to impose legal obligations on fan manufacturers to create such fans in order to implement energy efficiency and conservation measures.
Fans that have earned stars for energy efficiency have been added to the authority’s required list. A one-star-rated fan will use less than 80 watts, according to the MEPS of an electric fan. Similar to that, fans with a star rating of 5 will use 45–50 watts when an AC inverter is used.
The government had earlier decided to relax regulatory duties on silicon shields that were required for import and use in fans and other electric items for efficiency reasons during a meeting on Monday. Vendors and importers would both benefit from this.
The plan also calls for a ban on inefficient bulbs, and tube lighting would be discontinued as of July 1, 2023. Only bulbs that meet approved standards for energy efficiency would be permitted on the market.