New sales tax order mandates clear retail price and tax display on Third Schedule goods to curb tax evasion
ISLAMABAD: The Federal Board of Revenue (FBR) has launched a nationwide crackdown on manufacturers and importers concealing the mandatory retail price and sales tax on products covered under the Third Schedule of the Sales Tax Act, 1990, warning that non-compliant businesses will face legal action.
In Sales Tax General Order (STGO) No. 8/2026, issued on Friday, the FBR said it had detected widespread violations where the printed retail price on Third Schedule goods was missing, illegible or deliberately concealed through packaging designs, stickers, wrappers, monograms and color schemes, making it difficult to determine the correct amount of sales tax payable.
The tax authority said such practices undermine transparency, facilitate tax evasion and impede effective tax enforcement.
Retail Price-Based Taxation
Under Section 3(2)(a) of the Sales Tax Act, 1990, goods listed in the Third Schedule are subject to 18 percent sales tax calculated on the retail price.
The law requires manufacturers—and importers in the case of imported goods—to legibly, prominently and indelibly print or emboss both the retail price and the amount of sales tax on every article, packet, container, package, cover or label before the goods are supplied to the market.
FBR Issues Strict Labeling Directions
The General Order directs all manufacturers and importers of Third Schedule goods to ensure that the printed retail price and sales tax amount are:
• Clearly printed and easily readable.
• Prominently visible to consumers and tax officials.
• Displayed in a font size and color that sharply contrasts with the background.
• Permanent and incapable of being erased, altered or obscured.
The FBR has specifically prohibited businesses from hiding or making the mandatory information unreadable through the use of stickers, wrappers, decorative packaging, monograms or any other material affixed to the product or its packaging.
The tax authority instructed businesses to comply with all printing requirements “in letter and spirit.”
Violators Face Legal Action
The FBR warned that manufacturers and importers failing to comply with the new instructions will face enforcement proceedings under the relevant provisions of the Sales Tax Act, 1990, and the rules framed thereunder.
According to the tax authority, the initiative is aimed at ensuring the accurate assessment and collection of sales tax on retail-priced goods while preventing revenue leakage through misleading or non-compliant packaging practices.
Businesses May Seek Clarification
The FBR advised taxpayers requiring guidance on the implementation or interpretation of the General Order to contact the IR-Policy Wing for clarification.
The Sales Tax General Order (STGO) No. 9/2026 has taken immediate effect, making compliance mandatory for all manufacturers and importers of goods listed under the Third Schedule of the Sales Tax Act, 1990.