FBR Orders Digital Monitoring for Steel Factories

The Federal Board of Revenue (FBR) has instructed all registered steel manufacturers in Pakistan to install and activate electronic production monitoring systems at their factories and operational production lines by December 30, 2026.

The requirement was announced through Sales Tax General Order (STGO) No. 29 of 2026, issued on Wednesday. It applies to steel melters, re-rolling mills and integrated manufacturing units under the Sales Tax Act, 1990, and Sales Tax Rules, 2006.

The directive covers facilities manufacturing billets, ingots and other primary steel products, as well as factories processing semi-finished steel into bars, rods, reinforcing bars and other finished goods.

Electronic monitoring of production and dispatches

Under the new framework, electronic systems will monitor manufacturing activity through product identification, automated counting, dimensional checks and weight measurements. Goods leaving factories will also be tracked through integrated weighbridge systems.

The technology will record production quantities, estimated weights, vehicle registration numbers and shipment information. This data will enable the FBR to compare reported production with actual dispatches and detect potential inconsistencies.

Steel manufacturers must obtain and install the equipment through FBR-approved vendors, including M/s ISSM Labelling Solutions and M/s Obsidian. They will also be responsible for maintaining continuous system operation and ensuring secure data transmission to the FBR's Central Control Unit.

The order requires manufacturers to notify authorities within one hour of any system breakdown, damage or suspected tampering. Businesses must also provide 30 days' advance notice before making changes that could affect production lines or goods-dispatch arrangements.

Unrecorded steel dispatches prohibited

The FBR has barred manufacturers from removing or supplying specified steel products unless the relevant production and dispatch information has been captured through the approved monitoring system.

Manual documentation, privately installed cameras and independent weighbridge records will not be accepted as alternatives to the prescribed electronic system.

Chief Commissioners of Inland Revenue have been instructed to identify operating steel manufacturing facilities, supervise the installation process and ensure compliance with the new requirements.

The FBR has warned that manufacturers who fail to install or operate the systems, move goods without authorisation, conceal production facilities or tamper with monitoring equipment could face legal action under the Sales Tax Act, 1990, and the applicable rules.