The Federal Board of Revenue (FBR) has introduced a detailed procedure for the levy and collection of sales tax on specified goods based on value addition during the fiscal year 2025–26.
These changes follow the latest amendments to the Sales Tax Act, 1990, as incorporated through the Finance Act, 2025.
Under Section 7A of the updated law, the mechanism for determining and collecting tax on value addition has been clearly outlined. The provision states that, for certain goods or classes of goods notified by the Federal Government in the official Gazette, sales tax will be imposed only on the difference between the value at which the goods were acquired and the value at which they are supplied—either in the same form or after further manufacturing.
Additionally, for goods listed in the Twelfth Schedule, a minimum value addition tax will be payable by registered persons. The rate, method of collection, and specific conditions will be determined according to the schedule, with the Federal Government reserving the right to make future amendments through official notifications.
This updated approach ensures greater transparency and fairness in taxation by focusing on actual value addition rather than the total price of goods. Businesses dealing in specified goods must maintain accurate records of purchase and sale values to calculate tax liability correctly and remain compliant with FBR guidelines for 2025–26.
Disclaimer:
This article is for informational purposes only and should not be considered legal or financial advice. For specific guidance on value addition and sales tax compliance for 2025–26, consult the Federal Board of Revenue (FBR) or a qualified tax professional.