FBR SRO 2086 Explained: Steel Scrap Minimum Value Rises to 60% for Copper Recyclers in Pakistan

The Federal Board of Revenue (FBR) issued the notification in Islamabad on 5 November 2026. It is one paragraph long and changes one number in a table. But the table it changes sets the floor on which sales tax is charged for most locally made steel. We read S.R.O. 2086 together with the two notifications it builds on, and worked out what the change means for a tonne of scrap.

S.R.O. 2086 changes one figure in the steel value table

S.R.O. 2086 amends S.R.O. 2402(I)/2025 of 10 December 2025, as already amended by S.R.O. 1829(I)/2026 of 15 October 2026. It makes two edits to serial number 5 of the table. It deletes a stray "; and" in the description column, and it replaces the figure "55" with "60" in the value column.

The legal power is the first proviso to clause (46) of section 2 of the Sales Tax Act, 1990. That proviso lets FBR fix a minimum "value of supply" for goods. Sales tax is then charged on that value, or on the actual price if the price is higher.

The full steel minimum value table after the change

S.R.O. 2402 of December 2025 sets the base. Its first row ties everything to the average national retail price of steel bars, which the Pakistan Bureau of Statistics (PBS) publishes each month for six cities. The other rows are a share of that first value.

Who S.R.O. 2086 affects, and who it does not

Serial 5 is narrow. All four conditions must be met at once for the 60% floor to apply:

• The goods are re-meltable iron and steel scrap under tariff heading 72.04.
• The seller is a manufacturer-cum-exporter of recycled copper.
• That seller is authorised under the Export Facilitation Scheme, 2021 (EFS), FBR's scheme for duty and tax free inputs for exporters.
• The buyer is a registered steel melter, and the supply is direct.

Copper recyclers import mixed metal scrap, take out the copper and are left with iron and steel pieces. Serial 5 sets the floor value when they sell those pieces to a furnace. A scrap dealer who is not an EFS copper recycler is not covered by serial 5. Neither are rebar buyers, builders or households. Steel bar prices in shops are not set by this notification.

Steel melters have other FBR rules too. Many pay sales tax at a fixed rate per unit of electricity, as we explained in our guide to steel melters' sales tax per unit. The scrap rules for melters are in our report on S.R.O. 1788 and the scrap test.

What 60% means for a tonne of scrap

The minimum value is a share of the serial 1 value, so the rupee effect depends on the PBS steel bar price for the month. Here is a worked example with a round, illustrative figure. It is not the actual PBS price.

1. Suppose the PBS average steel bar price is Rs 250,000 a metric ton.
2. Serial 1 value is that minus Rs 1,500, so Rs 248,500.
3. The old serial 5 floor at 55% was Rs 136,675 a ton.
4. The new floor at 60% is Rs 149,100 a ton, Rs 12,425 higher.
5. The value includes sales tax. Taking an 18% rate, the tax inside it rises from about Rs 20,849 to about Rs 22,744 a ton.

So in this example the tax on each ton rises by about Rs 1,895. To work out your own figure, use the PBS steel bar average for the month of supply. If the actual price on the invoice is higher than the floor, tax is charged on the actual price and the floor does not bite.

Two steel notices in the same week

S.R.O. 2086 came on 5 November. A day later, on 6 November 2026, FBR issued Sales Tax General Order 33 of 2026. It adds one company, Nauman Steel (SMC-Private) Limited of S.I.T.E. Karachi, to the list kept under STGO 10 of 2026 for iron and steel makers that turn into companies, a process FBR calls voluntary corporatization.

STGO 33 does not change any rate. It only records the new entity's NTN, STRN and factory address against the older one. For the other steel orders of 2026, see our reports on STGO 28 and STGO 31 for captive power.

Common questions

What does FBR S.R.O. 2086 of 2026 do?

It raises the minimum value for sales tax on one class of steel scrap, serial 5 of S.R.O. 2402 of 2025, from 55% to 60% of the steel bar value.

Does S.R.O. 2086 raise steel bar prices?

No. It does not touch serial 1, the steel bar value. It applies only to scrap sold by EFS copper recyclers to registered steel melters.

When does the 60% value apply from?

The notification is dated 5 November 2026 and does not name a later start date. Ask your tax adviser how it applies to supplies made before that day.

Is the minimum value inclusive of sales tax?

Yes. The column in S.R.O. 2402 is headed "minimum values inclusive of sales tax", so the tax sits inside the floor value.

Which earlier notification added the scrap row?

S.R.O. 1829(I)/2026 of 15 October 2026 added serial 5 at 55%. S.R.O. 2086 changed that figure to 60% three weeks later.

Where can I read the notification?

On FBR's SRO page under Sales Tax, listed as "Amendments in S.R.O. 1829(I)/2026 Dated 15th October, 2026".

Last checked: 10 November 2026, from S.R.O. 2086(I)/2026, S.R.O. 1829(I)/2026, S.R.O. 2402(I)/2025 and STGO 33 of 2026 on fbr.gov.pk.