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Tag: Retail price

  • Retail price defined under Sales Tax Act

    Retail price defined under Sales Tax Act

    Sales Tax Act, 1990 has defined ‘retail price’ as a price fixed for sales of goods to the end consumers.

    The Sales Tax Act, 1990 [updated up to June 30, 2020 issued by the Federal Board of Revenue (FBR)] defines the ‘retail price’ with reference to the Third Schedule of the Act, as the price fixed by the manufacturer or importer, in case of imported goods, inclusive of all duties, charges and taxes (other than sales tax) at which any particular brand or variety of any article should be sold to the general body of consumers or, if more than one such price is so fixed for the same brand or variety, the highest of such price:

    Provided that the FBR may through a general order specify zones or areas for the purpose of determination of highest retail price for any brand or variety of goods.

    The Act also defines the work retailer as a person supplying goods to general public for the purpose of consumption:

    Provided that any person, who combines the business of import and retail or manufacture or production with retail, shall notify and advertise wholesale prices and retail prices separately, and declare the address of retail outlets.

  • Auto parts, motorcycles should be excluded from retail price printing condition

    Auto parts, motorcycles should be excluded from retail price printing condition

    KARACHI: Federal Board of Revenue (FBR) has been urged to exclude auto spare parts and motorcycles from the requirement of printing of retail price.

    Karachi Chamber of Commerce and Industry (KCCI) in proposals for budget 2020/2021 submitted to the FBR, said that due to inclusion of motorcycle and automobile spare parts in the Third Schedule, to the Sales Tax Act, 1990 vide new serial No.49 in column (1) through the Finance Act, 2019, serious hardship is being faced by importers of motorcycle and automobile spare parts.

    Under the amended procedure, importers are required to print MRP (Maximum Retail Price) on the imported parts and pay sales tax and additional sales tax on customs value.

    The chamber said that importers were unable to determine the landed cost at the time of delivery of cargo at destination due to the fluctuations in exchange rates.

    “It is not possible to determine the sale price of imported auto parts at which the retailers will sell the same to end-users.”

    There is wide variation in sale prices by wholesalers and retailers. Importers cannot pre-determine and declare maximum retail price as required under the new regulations.

    Due to market fluctuations and rapidly changing demand and supply situation, importers cannot determine the final sale price and sales tax accordingly at import stage.

    Frequent and unpredictable fluctuation in exchange rates make it impracticable to forecast the actual landed cost and sale prices, the chamber said.

    The KCCI proposed that motorcycle and auto parts are not a consumer product /grocery item which may require MRP to be printed on the product. It is an industrial use product, supporting Pakistan’s auto industry and meeting the requirements of after-market.

    “Therefore the automobile/motorcycle spare parts may be taken out of Third Schedule and included in normal tax regime for assessment of Customs Duty, Sales Tax and WHT etc.

    Customs authorities have the competency to assess the values and levy the Custom Duty and Taxes accordingly.

    The KCCI said that the proposed amendment would facilitate importers and dealers in customs clearance and avoid detention and demurrage charges.

    Curtail rampant smuggling which has been on the rise after inclusion of Autoparts in Third Schedule.

    Further it would support automobile industry and after market. Prevent delays in clearance and resulting costs.

  • FBR to impose penalty for not printing retail price on imported goods

    FBR to impose penalty for not printing retail price on imported goods

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday said that printing of retail price on imported consumer items is mandatory and any violation by importer/manufacturer will attract fine and penalty.

    Through recent Tax Laws (Second Amendment) Ordinance, 2019, penalty has been introduced for importers and manufacturers violating the provision of printing retail price.

    The FBR said that it had received queries from various Customs Clearing Agents and Customs Collectorates regarding application of newly inserted Serial No.26 in Section33 of the Sales Tax Act, 1990, related to penalty.

    In this regard it is clarified that at import stage the mechanism of clearing of goods already defined in STGO 103 of 2019 is to be followed.

    The STGO recognizes that in some situations, the printing of retail price is not possible and allows clearance of goods on payment of Sales Tax in the manner as provided therein subject to furnishing of an undertaking that the retail price shall be duly printed.

    Therefore, the provisions of the STGO be followed by the Customs Authorities.

    However, the aforesaid undertaking shall mention that the importer shall print the retail price within ten days of release/clearance of the consignment and intimate the Commissioner concerned for inspection before further supply.

    However, if inspection is not made within ten days after intimation the importer/manufacturer will be free to supply in the market.

    The newly inserted penal provisions shall be invoked if the manufacturer/importer violates the undertaking or is otherwise non-compliant with requirement of retail price taxation.

  • KCCI seeks 90-day extension for clearance relaxation in printing retail price

    KCCI seeks 90-day extension for clearance relaxation in printing retail price

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has urged Federal Board of Revenue (FBR) to extend the relaxation for further 90 days that was given for clearance of imported items without printing of retail price.

    Junaid Esmail Makda, President, KCCI has requested the FBR to extend the relaxation given for clearance of imported items under Third Schedule without printing of retail price or affixing stickers for 90 more days as the import orders were booked in advance for around 3 to 6 months while the packaging of the ordered products was already designed and printed at the initial stage.

    In a letter sent to Chairman FBR Shabbar Zaidi, President KCCI stated that on KCCI’s request FBR gave an extension of just 15 days for the implementation of the said condition but it was too short for importers to fulfill the new requirements and the process still remains incomplete, hence, the relevant notification should be extended for 90 days.

    He was of the opinion that it was not possible to re-print MRP on the old stock while any request of making changes at the eleventh hour are unacceptable to the sellers and spoils the credibility / goodwill of the trader.

    “The MRP cannot be assessed by the importer as they sell their imported goods to dealers who sell to distributors and they subsequently sell to retailers across the country while the end retail price including all the margins was determined afterwards which varies in different cases and cannot be standardized across Pakistan”, he added.

    He said that KCCI has received repeated requests from the importers that they were facing severe problems in meeting the requirements of printing Minimum Retail Price (MRP) on items added under the Third Schedule. In the Finance Act 2019-20, Sales Tax has been imposed at the import stage based on the printed MRP and many new items have been added to the Third Schedule of Sales Tax Act 1990.

    He said that on KCCI’s request, FBR allowed clearance of imported Third Schedule items without printing of retail price or affixing stickers for which goods declaration are filed by 31st July, 2019 subject to the condition that the importer declares retail price for each of the imported items for the assessment of sales tax vide Sales Tax General Order No. 102 / 2019 dated July 15, 2019 to clear the backlog at the ports.

    He reiterated that it is impractical to pre-assess and then print the MRP at import stage on each and every item as a lot of factors affect the retail prices of the products like currency fluctuations, packing style, fragility and size of product, distance from ports &, transportation costs, market dynamics, competition, shelf life, and uncertainties of sale in future especially for seasonal items.

    Hence, Junaid Makda requested to withdraw the condition of printing MRP on imported goods or otherwise, allow MRP of the imported items to be declared on WEBOC along with the Goods Declaration (GD) for tax assessment purposes instead of being printed on each and every imported item. After the imposition of MRP, what will be the status of Import Trade Price (ITP) / Customs Valuation of items in the third schedule which also needs to be clarified, he added.

  • Imported consumer items to be cleared on declared retail prices: FBR

    Imported consumer items to be cleared on declared retail prices: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) has said that the consumers items falling under mandatory retail price print will be assessed at declared retail price at clearance stage instead of determination through customs value.

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  • FBR directs customs to ensure retail price print on imported goods

    FBR directs customs to ensure retail price print on imported goods

    KARACHI: Federal Board of Revenue (FBR) has directed customs authorities to ensure printing of retail prices on imported goods for collection of sales tax while clearance of consignments.

    The Inland Revenue Policy Wing issued directives on Wednesday to Inland Revenue and Customs for the implementation of changes brought in to Sales Tax Act, 1990 through Finance Act, 2019.

    It said that the locally manufactured goods specified in Third Schedule are already chargeable to sales tax on the basis of retail price.

    Now, through amendment in section 3(2)(a) of Sales Tax Act, 1990, retail price taxation has also been made applicable to imported goods.

    The importers are required to print the retail price in the manner prescribed in the aforesaid clause and such goods shall be assessed on the basis of declared retail price and not on the basis of customs value under section 25 of the Customs Act, 1969.

    “All Model Customs Collectorates (MCCs) are requested to ensure that the declared retail prices are duly printed in the prescribed manner and that the sales tax is charged on the basis of such declared retail price,” the FBR said.

    Twelve new serial numbers have been added to Third Schedule through Finance Act, 2019 such as electric and gas appliances, motorcycles, auto-rickshaws biscuits, tiles etc.

    The FBR directed Large Taxpayers Units (LTUs) / Regional Tax Offices (RTOs) / MCCs should ensure application accordingly.

    The FBR defined the value of supply, which has been amended to provide for application of retail price taxation to imported goods, and also to incorporate provisions from rescinded rules and STGOs.

    These modifications are enumerated below:

    Amendment in clause (d) to exclude imported Third Schedule items from purview of application of ‘customs value’ determined under section 25 of the Customs Act, 1969. These items are to be assessed on the basis of declared retail price. Further such price is also required to be printed on imported goods as stipulated in clause (a) of section 3(2) of the Sales Tax Act, 1990.

    (ii) Substitution of clause (f) in section 2(46) pertains to value of supply in case of toll manufacturing, which has defined to be the charges received in lieu of value addition carried out on goods;

    (iii) Newly added clause (h) defines value to be energy purchase price in case of supply by IPPs; and

    (iv) Another new clause (i) transposes the provisions relating to exclusion of late payment surcharge from value, in case of supply of electricity and gas by the distribution companies, from the rescinded Sales Tax Special Procedures Rules, 2007.

  • DRAP notifies up to 15 percent increase in medicine retail prices

    DRAP notifies up to 15 percent increase in medicine retail prices

    ISLAMABAD – The Drug Regulatory Authority of Pakistan (DRAP) has issued a notification announcing an increase in the maximum retail prices of medicines by up to 15 percent.

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