Govt removes duties on silicone sheet imports to facilitate energy efficient appliances

ISLAMABAD:  The government has decided to remove duties on import of silicon steel sheets which is used for manufacturing of electric fans, motors, washing machines, transformers to facilitate the production of energy efficient home appliances.

The decision comes in line after the government banned the manufacturing, production of traditional fans and bulbs from July 1, 2023 as it consumes higher energy. 

According to documents available, after due deliberation and consultation with relevant stakeholders, a summary of amendment in SRO No. 565 has been moved to the Ministry of Commerce (MoC). The MoC is subsequently going to submit a case to the National Tariff Policy for revision of SRO No. 565(I), 2006 to extend the exemptions to all manufacturers and vendors of electrical appliances and get approval of the federal cabinet through Economic Coordination Committee.  

Earlier, the issues of bulb and fan industry were discussed in a committee constituted by Prime Minister. Several meetings were conducted with Ministry Science and Technology (MoST), Ministry of Industries and Production, Engineering Development Board (EDB), Pakistan Standard and Quality Control Authority (PSQCA), MoC and National Energy Efficiency and Conservation Authority (NEECA).

As per details, the fan industry is using Non-Grain Oriented Electrical Steel Sheet (NGOESS) and labelled under Pakistan Customs Tariffs (PCT) headings of 7225.1900 and 7226.1900 for manufacturing of fan stators and rotors. The NGOESS has 5% Regulatory Duty (RD) and 2% Additional Custom Duty (ACD) whereas electrical steel sheet has 5% Custom Duty under the existing SRO.

According to documents the financial impact of the duty exemptions to these two products is likely to be over Rs 200 million because more than 20,000 metric ton were imported till March 7, 2023 of the current fiscal year, paying Rs 180 million duty.  

Banning traditional appliances

As per sources, there are approximately 41 million fans installed in houses and other buildings across the country. The ministry of energy will collaborate with power companies (DISCOs) to ensure installation of at least one new highly energy efficient fan in the premise of every consumer under an installment plan of its cost.

As per the approved plan, the price of a new fan may cost more than Rs 12,000 to consumers. However, the price will be adjusted in monthly electricity bills in installments.

National Energy Efficiency and Conservation Authority (NEECA) has notified the minimum energy performance standard (MEPS) for manufacturing of only those fans having power factor of less than 80 watts. Meanwhile, PSQCA has notified SRO to have legal binding on the manufacturers of fans to produce such fans for implementation of energy efficiency and conservation measures.

Star rated energy efficient fans have been included in the authority’s mandatory list.  As pr the MEPS of electric fan, star rating 1 fan will consume less than 80 watts. Similarly, star rating-5 fans will consume up to 45-50 watts with the inclusion of an AC inverter.

Earlier in a meeting held on Monday, the government had also decided to relax regulatory duty on silicon shields needed to import and use in the fans and other electric items for efficiency purposes. Both importers and vendors would be facilitated in this regard.

The plan also includes the ban on energy inefficient bulbs and the tube lights would also be stopped from July 1, 2023. Only energy efficient bulbs of approved standard would be allowed in the market.