The Federal Board of Revenue has revised the sales tax treatment applicable to certain local supplies falling under Serial No. 65 of the Third Schedule to the Sales Tax Act, 1990. Through the corrigendum to the relevant Sales Tax General Order, FBR has clarified that, for specified local supplies by manufacturers, sales tax will be charged on the “value of supply” as defined under section 2(46) rather than applying the standard retail-price mechanism across the board.
The revised treatment covers five specified categories, including supplies through manufacturers’ own FBR-integrated and POS-compliant outlets, supplies by importers to qualifying manufacturers or retailers, direct imports by integrated retailers for onward sale to consumers, supplies to specified corporate and government end-users, and supplies by manufacturers producing exclusively for integrated retailers. Digital integration, POS compliance and issuance of digital tax invoices therefore become important conditions for businesses seeking to operate within the prescribed framework.
For manufacturers, importers and large retailers, this clarification is commercially significant because the basis on which sales tax is calculated directly affects pricing, margins, invoicing and tax exposure. Businesses dealing in products covered by Serial No. 65 should carefully review their supply arrangements, customer categories and digital-integration status to determine whether their transactions qualify for taxation on value of supply or remain subject to the applicable Third Schedule valuation mechanism. The revised framework has been stated to take effect from 1 July 2026.