PSMA condemns FBR's SRO 1413(I)/2025 implementation decision
The Association has highlighted key concerns that the lack of comprehensive registration of scrap dealers and steel product vendors will create significant challenges for steel melters in complying with the new regulations. Without such entities proper registration with FBR, issuing electronic invoices will become nearly impossible, disrupting business operations and leading to potential penalties and fines. Implementing the SRO without addressing registration issues may lead to supply chain disruptions, impacting the steel industry's overall performance and the economy.
We urge the FBR to reconsider the implementation timeline and prioritize the registration of all entities in the supply chain. Without this, the steel melting industry will face significant challenges in complying with the new regulations. We request the FBR to engage with industry stakeholders to address concerns and provide necessary support for smooth implementation.
Copyright Business Recorder, 2025
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
an hour ago
- Business Recorder
Sugar cartelisation case hearing rescheduled on mills' request
The Competition Commission of Pakistan (CCP) has rescheduled the rehearing of the cartelisation case against the Pakistan Sugar Mills Association (PSMA) and its member mills, following requests from their legal counsels. The hearings, initially fixed for August 4-7, will now take place from September 22-25, 2025. Over 70 sugar mills requested postponement of hearing, the CCP said in a press release. The adjournment was sought on grounds that over 50 mills have filed appeals against the Competition Appellate Tribunal (CAT) order in the Supreme Court, while others cited unavailability of legal representatives due to the Supreme Court's summer recess. While the CCP had scheduled day-to-day hearings in line with the directions of the CAT, it has allowed a one-time postponement in the interest of fairness and to ensure due opportunity for all parties to present their case. The commission will not entertain further delays, and in case of non-appearance or repeated adjournment requests, ex-parte proceedings may be initiated. Notices issued to sugar mills for rehearing in cartelisation case The proceedings pertain to show cause notices issued in November 2020 to PSMA and its member mills for alleged cartelisation and anti-competitive conduct. Hearing notices were most recently issued on July 9 in compliance with CAT's May 21 order, which directed the commission to rehear the matter before a member or chairperson not part of the original bench. Rs44bn penalty on sugar mills: CAT remands case to CCP for rehearing It may be recalled that in 2021, the CCP had imposed a penalty of Rs44 billion on PSMA and its member mills for cartelisation. The order was later set aside by the tribunal, which held that the casting vote exercised by the then chairperson in a 2-2 deadlock was not permissible under the Competition Act, 2010 in quasi-judicial proceedings. CCP 'unearths' sugar cartel CCP 'unearthed' a cartel in the sugar industry through an extensive enquiry in October 2020, which concluded that the Pakistan Sugar Mills Association (PSMA) has been acting as a front runner for cartelisation in the sugar industry since 2010. The CCP's enquiry report concluded, while determining the causes behind the sugar shortage/crisis and price hike, that the sugar mills were using the PSMA platform to take a collective decision to use exports as a means of sustaining or controlling prices or 'keeping it stable'. The enquiry has concluded that the hike in sugar prices appears to be the direct result of misreporting in sugar stock positions (of which PSMA was aware of) that led to a decision to delay sugar imports. The enquiry report observed that the decision not to import in a timely manner caused a rise in sugar prices between, July to September 2020 by Rs11.6 per kg. Report accuses sugar millers of acting like cartel The CCP has the evidence that indicates that in 2019 only, the domestic price of sugar hiked by Rs18/kg due to the commodity's export, while the sugar barons made an additional gain of Rs40 billion in revenue in addition to payment of Rs29.22 billion as subsidy to them. The enquiry report said that evidence gathered during raids on the premises of the PSMA and the JDW Sugar Mills seems to suggest these anti-competitive activities have continued since 2010.
Business Recorder
6 hours ago
- Business Recorder
Sugar cartelisation case hearing postponed on mills' request
The Competition Commission of Pakistan (CCP) has postponed and rescheduled the hearing of sugar cartelisation case to September 22–25, on request of sugar mills. Over 70 sugar mills had requested the postponement of the hearing, the CCP said in a press release. In their adjournment requests, they stated they would not be able to appear due to Supreme Court holidays. More than 50 mills have also filed appeals in the Supreme Court against the Competition Appellate Tribunal (CAT)'s decision. The competition commission said that the hearing is being postponed once to fulfill the exigencies for justice. However, no further delay or adjournment will be granted, it maintained. The case will be heard on a daily basis, the commission added. Earlier, the tribunal had ordered the CCP to rehear the case. CCP issued notices to the Pakistan Sugar Mills Association (PSMA) on July 9 and its member sugar mills to appear for a hearing in the matter of show cause notices issued to the PSMA and member mills in November 2020 for alleged cartelisation and anti-competitive conduct. The proceedings were scheduled for August 4, 5, 6 and 7, 2025. 'The hearing notices have been issued in compliance with the May 21, 2025 order of the Competition Appellate Tribunal (CAT), which directed the matter to be reheard by the Chairperson or Member of the Commission who was not part of the earlier conflicting opinions. The Tribunal further directed that the matter be decided preferably within 90 days,' the CCP statement read. In 2021, the CCP had imposed a penalty of nearly Rs44 billion on PSMA and its member mills for violating competition laws. The order, however, was challenged in the CAT, which questioned the legality of the casting vote exercised by the then chairperson to break a 2-2 deadlock in the original four-member bench. 'The tribunal held that no casting vote could be exercised in quasi-judicial proceedings under the Competition Act, 2010, and set aside the resulting order. 'Through the current notices, CCP has directed all concerned parties to nominate authorized representatives and appear with all relevant facts and material for the rehearing,' the CCP said. CCP 'unearths' sugar cartel CCP 'unearthed' a cartel in the sugar industry through an extensive enquiry in October 2020, which concluded that the Pakistan Sugar Mills Association (PSMA) has been acting as a front runner for cartelisation in the sugar industry since 2010. The CCP's enquiry report concluded, while determining the causes behind the sugar shortage/crisis and price hike, that the sugar mills were using the PSMA platform to take a collective decision to use exports as a means of sustaining or controlling prices or 'keeping it stable'. The enquiry has concluded that the hike in sugar prices appears to be the direct result of misreporting in sugar stock positions (of which PSMA was aware of) that led to a decision to delay sugar imports. The enquiry report observed that the decision not to import in a timely manner caused a rise in sugar prices between, July to September 2020 by Rs11.6 per kg. The CCP has the evidence that indicates that in 2019 only, the domestic price of sugar hiked by Rs18/kg due to the commodity's export, while the sugar barons made an additional gain of Rs40 billion in revenue in addition to payment of Rs29.22 billion as subsidy to them. The enquiry report said that evidence gathered during raids on the premises of the PSMA and the JDW Sugar Mills seems to suggest these anti-competitive activities have continued since 2010.
Express Tribune
12 hours ago
- Express Tribune
Tobacco sector: potential & illicit trade challenges
Listen to article Pakistan's tobacco industry plays a pivotal role in the nation's economy, providing employment opportunities, generating substantial tax revenue and supporting the agricultural sector. However, it faces growing challenges, including stringent regulations and the pervasive issue of cigarette smuggling, which undermines legitimate businesses and erodes government revenue. According to data from the Pakistan Bureau of Statistics (PBS) and industry reports, Pakistan's tobacco industry is valued at approximately $2.3 billion as of 2024, with a projected compound annual growth rate (CAGR) of 6.28% from 2025 to 2029. The cigarette segment dominates the market, with an estimated worth of $1.9 billion in 2025. Despite its economic significance, the industry has witnessed a decline in legal cigarette sales, which fell 8.3% in 2024, from 36 billion to 33 billion sticks, according to statistics from the Federal Board of Revenue (FBR). The tobacco sector remains a vital source of revenue, contributing Rs150 billion ($540 million) in taxes during fiscal year 2023-24, as reported by the FBR. This contribution includes federal excise duty (FED), sales tax and other levies, which help fund various government initiatives. Tobacco farming continues to be a critical activity, particularly in Khyber-Pakhtunkhwa and Punjab, where smallholder farmers benefit from higher per-acre returns compared to traditional crops like wheat or maize. Pakistan has implemented stringent anti-smoking policies in line with World Health Organisation (WHO) guidelines. These measures include higher taxes, graphical health warnings on packaging and bans on public smoking. In 2022-23, the FED on cigarettes saw a significant increase, raising the FED share in retail prices to 48% for low-tier brands and 68% for high-tier brands, according to the FBR. While these measures aim to reduce smoking rates, they have, on the contrary, fueled the illicit cigarette trade, which accounted for 46 billion out of 79 billion cigarettes sold in 2024, as per an Oxford Economics study. The illicit trade poses a significant threat to Pakistan's tobacco industry and the broader economy. Over the past decade, the country has lost over Rs567 billion in revenue due to smuggling and illegal manufacturing, as estimated by the FBR. In 2024 alone, legal cigarette sales dropped 8.3%, while the illicit market expanded. The availability of 74 smuggled cigarette brands across the country, as reported by the FBR, reflects inadequate enforcement measures. Many of these smuggled brands evade high taxation, which makes them cheaper and more accessible, thereby exacerbating public health risks. Pakistan's tobacco industry operates within a regional context that includes India, Bangladesh and Iran, each of which faces similar regulatory and economic challenges. India's tobacco industry is one of the largest in the world, valued at $11 billion in 2024, according to the India Brand Equity Foundation, with a projected CAGR of 4.5% from 2025 to 2029. Cigarette sales in India are under pressure due to high taxes and stringent regulations, including an 85% graphical health warning mandate. Despite contributing over $7 billion in annual tax revenue, India's illicit cigarette trade accounts for nearly 25% of the market, reported the Euromonitor International. Bangladesh's tobacco industry is valued at $1.8 billion, with a projected CAGR of 5.2%, said the Bangladesh Bureau of Statistics. The sector contributes $1.2 billion in taxes and employs thousands of farmers, particularly in Rangpur and Chittagong regions. Regulatory measures, including tax hikes and smoking bans, have led to illicit trade accounting for 20% of sales, showed WHO statistics. Smuggled products primarily enter the country from India and Myanmar, facilitated by weak border enforcement. Iran's tobacco industry, valued at $1.2 billion, is heavily regulated, with a projected CAGR of 3.8%, according to the Iranian Customs Authority. Despite contributing $800 million in taxes, strict regulatory measures have caused legal sales to decline, fueling the growth of illicit trade. Smuggling, primarily from Afghanistan and Iraq, makes up 30% of the market. All four countries — Pakistan, India, Bangladesh and Iran — struggle with the issue of smuggled cigarettes, which harm legitimate businesses and reduce government revenues. Pakistan's illicit trade share, at 58%, is the highest in the region, underscoring the urgent need for stronger enforcement measures. Pakistan's high taxation and graphical health warnings have disproportionately impacted legal sales compared to its regional counterparts. Finding a balance between public health objectives and economic interests remains a critical challenge. Despite these challenges, Pakistan's projected CAGR of 6.28% is the highest in the region, suggesting significant potential for expansion if the issue of illicit trade is addressed effectively. Enhanced regional cooperation, particularly with India and Bangladesh, could help curb cross-border smuggling. Sharing best practices in enforcement, digital tracking systems and policy frameworks could prove mutually beneficial. Pakistan's tobacco industry should also explore opportunities in reduced-risk products, such as e-cigarettes and heated tobacco, to align with global trends. Supporting farmers in transitioning to alternative crops could help mitigate the risks associated with regulatory pressures. In conclusion, while Pakistan's tobacco industry remains a key economic contributor, it faces significant challenges from regulatory pressures and illicit trade. Proactive measures by industry stakeholders and the government, coupled with regional collaboration, will be essential to navigate these challenges and secure a sustainable future for the sector. The writer is a Mechanical Engineer and is pursuing Master's degree
