FBR clarifies how retail prices are determined for Third Schedule goods, including rules for multiple prices, beverages and imports.

ISLAMABAD: The Federal Board of Revenue (FBR) has defined the term ‘retail price’ under the Sales Tax Act, 1990 for tax year 2027, clarifying how the price of goods covered by the Third Schedule is to be determined.

According to the Sales Tax Act, 1990, updated up to June 30, 2026, “retail price”, with reference to the Third Schedule, means the price fixed by the manufacturer or importer, in the case of imported goods, inclusive of all duties, charges and taxes other than sales tax.

The law states that the retail price is the price at which a particular brand or variety of an article is sold to the general body of consumers.

Where more than one retail price has been fixed for the same brand or variety, the highest price will be treated as the retail price.

The FBR may also specify zones or areas through a general order for determining the highest retail price of any brand or variety of goods.

Special rules for certain beverages

The law further provides specific provisions concerning certain beverages.

In the case of aerated water, beverages, mineral water and fruit juices, any reduction in price on account of chilling charges or similar charges cannot exceed 5% of the price inclusive of sales tax, Federal Excise Duty and other taxes, excluding income tax, on which the goods are actually sold to consumers.

The FBR may also, where deemed necessary, fix the retail price of goods specified in the Third Schedule through a notification published in the official Gazette.

Minimum retail price for imported goods

For imported goods listed in the Third Schedule, the retail price cannot be less than 130% of the value determined under Section 25 of the Customs Act, 1969, including customs duties and Federal Excise Duty imposed on such goods.

The definition provides the legal basis for determining retail prices for sales tax purposes on specified goods and establishes the applicable pricing framework for manufacturers and importers.