Karachi, November 12, 2023 – Retail price in Pakistan has been explained under Sales Tax Act, 1990 by the Federal Board of Revenue (FBR) for Tax Year 2024.
The FBR released Sales Tax Act, 1990 applicable from July 1, 2023 for the tax year 2024.
The FBR in Pakistan has brought clarity to the concept of retail prices under the Sales Tax Act, 1990, providing a detailed explanation for Tax Year 2024. The FBR’s recent release of the Sales Tax Act, 1990, applicable from July 1, 2023, aims to provide a clear framework for businesses and consumers regarding the determination and application of retail prices.
According to the updated law, the retail price is defined with reference to the Third Schedule of the Sales Tax Act, 1990. The retail price is the price fixed by the manufacturer or importer (in the case of imported goods), inclusive of all duties, charges, and taxes (excluding sales tax). This price represents the amount at which a specific brand or variety of any article should be sold to the general body of consumers. In cases where multiple prices are fixed for the same brand or variety, the highest of such prices is considered the retail price.
The provision, aimed at ensuring transparency and consistency in pricing, is designed to benefit consumers by providing them with a clear understanding of the costs involved in purchasing a particular product. This measure is particularly significant in a market where consumers often face challenges in discerning the actual costs embedded in the retail price due to various taxes and charges.
The Sales Tax Act, 1990, further empowers the Board to specify zones or areas through a general order for the determination of the highest retail price for any brand or variety of goods. This provision acknowledges the regional variations in costs and enables the authorities to tailor the determination of retail prices to specific geographical zones, ensuring fairness and feasibility.
The law also delves into the definition of retailers, categorizing them as individuals or entities supplying goods to the general public for the purpose of consumption. However, a noteworthy provision is added to address businesses that combine import, manufacturing, or production with retail activities. Such entities are required to notify and advertise wholesale prices and retail prices separately. Additionally, these businesses must declare the addresses of their retail outlets, promoting transparency and facilitating consumer choice.
This move by the FBR aligns with the broader efforts to streamline and regulate the retail sector in Pakistan. By defining and explaining retail prices, the government aims to create a fair and transparent environment for both businesses and consumers. The emphasis on separate notification and advertising of wholesale and retail prices is a step towards preventing confusion and ensuring that consumers have access to accurate information while making purchasing decisions.
As Pakistan moves forward into Tax Year 2024, these clarifications in the Sales Tax Act, 1990, are expected to contribute to a more informed and consumer-friendly retail landscape, fostering a healthier market for businesses and providing citizens with the confidence that they are paying fair prices for the goods they consume.