ISLAMABAD: The Federal Board of Revenue (FBR) has fixed minimum value of domestically produced ghee and cooking oil for accurate assessment of sales tax of finished products (branded items of ghee/cooking oil industry) for September 2026. The step would check possible sales tax evasion by the ghee/cooking oil industry as well ensure authentic price of the ghee and cooking oil products for the general consumers.
Senior FBR officials said that the SRO has been issued to discourage massive under invoicing and huge mis-declarations committed by ghee and cooking oil sector of Pakistan and to ensure tax collection on actual prices.
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According to an S.R.O. 1632(1)/2026 issued by the FBR, the Board has fixed minimum values for domestically produced vegetable and animal fats and oils, ghee and cooking oil for sales tax purposes, with different values prescribed for three categories of brands.
The minimum value of domestically produced vegetable and animal fats and oils, ghee and cooking oil will generally be based on the average national retail price published by the Pakistan Bureau of Statistics (PBS) under the weekly Sensitive Price Indicator (SPI) during the last week of the immediately preceding month, less Rs25 per kilogram.
The Rs25 per kilogram reduction, however, will only be admissible to registered persons compliant with the FBR’s digital invoicing and production monitoring system.
The FBR has placed brands in three categories. Category A, comprising Dalda, Habib, Sufi, Mezan, Soya Supreme and EVA, will have a minimum value equal to 100 percent of the prescribed value. Category B, comprising Manpasand, Habib Handi, Seasons, Kashmir, Kausar, Shah Taj, Kisan, Shafaq and Sultan, will have a minimum value equal to 93 percent. Category C, covering all other brands, will have a minimum value equal to 85 percent.
The notification also provided an illustrative calculation. Based on PBS prices published on July 26, 2026, the average price was calculated at Rs613 per litre/kg. After allowing a reduction of Rs25, the minimum retail price was determined at Rs588 per litre/kg.
For September 2026, the minimum values prescribed under the three categories are Rs588 per litre/kg for Category A, Rs547 for Category B and Rs500 for Category C.
The FBR further clarified that supplies of oil and ghee to the armed forces will be subject to the value or price specified in the relevant contract.
For subsequent months, the retail price will be calculated in accordance with the mechanism outlined in the notification. Where the actual value at which the products are supplied is higher than the value fixed by the FBR, sales tax will be charged on the higher value.
The notification, issued under the first proviso to clause (46) of section 2 of the Sales Tax Act, 1990, will remain applicable until the tax period of November 2026.
Copyright Business Recorder, 2026
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