FBR to charge sales tax on basis of value of supply

SOHAIL SARFRAZ

ISLAMABAD: The Federal Board of Revenue (FBR) will charge sales tax on the basis of value of supply in cases of local supplies of products/items by five categories of manufacturers/importers.

According to a sales tax general order (19 of 2026) issued by the FBR on Thursday, the Board has issued a corrigendum. In case of local supplies by the manufacturer, sales tax shall be charged on the value of supply as defined in section 2(46) of the Sales Tax Act. In the case of imports of goods specified under Serial No. 65 of the Third Schedule. Sales tax is assessable and collectable on a value equal to one hundred and thirty per cent (l30 percent) of the value determined under section 25 of the Customs Act. 1969 inclusive of the applicable customs duties and Federal Excise Duty. Provided that such retailer shall pay tax on retail value of stitch goods. Provided further that both the supplier and the retailer are digitally integrated with the FBR and are POS-compliant, and that both issue digital tax invoices.

These nature of supplies included supplies of footwear made by registered manufacturers through their own FBR digitally integrated and POS-compliant retail outlets; supplies made by importers to registered manufacturers or FBR digitally integrated and POS cornplianl retailers; goods imported directly the FBR digitally integrated and POS-compliant retailers for subsequent supply to end consumers; supplies made by digitally integrated re manufacturers or registered importers to registered corporate entities, Federal or Provincial government departments, autonomous bodies or statutory bodies, as end-consumer for their own use and supplies made by a registered taxpayer manufacturing exclusively for an FBR digitally integrated and POS-compliant retailer.

In order to remove ambiguity and ensure uniform implementation of the provisions relating to Serial No. 65 of the Third Schedule to the Sales Tax Act. 1990, the Federal Board of Revenue hereby makes the following amendments in the aforesaid General Order:

(i) the existing, Annexure-A” appended to the aforesaid General order shall stand withdrawn and substituted with the revised Annexure-A annexed to this Corrigendum.

(ii) The revised “Annexure-A” shall constitute an integral part of Sales Tax General Order No.11/ 2026 / IR Policy and shall govern the levy, assessment and collection of sales tax in respect of supplies falling within the scope of Serial No. 65 of the Third Schedule to the Sales Tax Act, 1990.

(iii) All references in the aforesaid General order to “Annexure-A” shall, henceforth, be construed as references to the revised ‘’Annexure. A, annexed to this corrigendum.

(iv) Except to the extern modified through this Corrigendum, all other provisions of Sales Tax General order No.11 of 2026 IR Policy shall remain unchanged and shall continue to have full force and effect.

(v This corrigendum shall take effect from 1st July, 2026.