FBR Abolishes Domestic Price of Sugar to Evaluate Sales Tax

The Federal Board of Revenue (FBR) has abolished the domestic price of sugar, fixed at Rs. 60 per kg in 2016, for the purpose of assessment of sales tax.

In this regard, the FBR has rescinded SRO 812(I)/2016 through an S.R.O. 895(1)/2021 issued here on Thursday.


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According to the FBR, currently, the price of white crystalline sugar is fixed at Rs.60/- per kg in terms of SRO 812(l)/2016, dated 02.09.2016, which is considerably below the actual market price of the commodity. In order to address this anomaly, sugar is proposed to be included in the Third Schedule to the Sales Tax Act, so that sales tax is charged and collected on the actual retail price of the product at the manufacturing stage.

This measure would not only ensure due payment of tax but also help in putting a more effective price control mechanism in place for sugar, FBR added.

The notification issued on Thursday revealed, in the exercise of the powers conferred by the first proviso to clause (46) of section 2 of the Sales Tax Act, 1990, the Federal Board of Revenue is pleased to rescind its Notification No. S.R.O. 812(1)/2016, dated the 2nd September, 2016.


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Under rescinded SRO 812(I)/2016, the FBR had a fixed value of domestically produced and imported sugar from September 2, 2016.

The value of domestically produced sugar was fixed at Rs 60 per kg, and the value of imported sugar was fixed at $725 per metric ton. The FBR has abolished this fixed value of $725 per MT on the import of the commodity, as well as the domestic stage.

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