FBR links cement sales tax to national retail prices from May 1

The Federal Board of Revenue (FBR) has introduced a new valuation mechanism for collecting sales tax on cement, tying the minimum retail price to the average national retail prices published in the Sensitive Price Index (SPI) by the Pakistan Bureau of Statistics (PBS).

The new pricing method, announced through SRO 746(I)/2025, will come into effect from May 1. 

Under the revised approach, the FBR will use the average national retail price of cement as reported in PBS’s weekly SPI, just prior to the 1st and 16th of each month, to set the minimum value for tax calculation. These rates will then apply for the two-week periods beginning on the corresponding dates.

The updated formula will be used to calculate sales tax under clause (a) of sub-section (2) of Section 3 of the Sales Tax Act, 1990. 

FBR officials said the decision is aimed at preventing under-invoicing practices within the cement sector by aligning the taxable value with officially reported retail prices.

By using PBS data as the benchmark, the FBR expects to streamline sales tax collection and reduce revenue leakage in the cement supply chain.