ISLAMABAD: The Federal Board of Revenue (FBR) has issued a new notification (S.R.O. 1126(I)/2025) dated June 27, 2025, to fix the minimum retail price of cement for the purpose of sales tax calculation. This directive, issued under the powers conferred by the Sales Tax Act, 1990, supersedes the earlier S.R.O. No. 746(I)/2025, which was issued on April 29, 2025.
The move aims to standardize the base price upon which sales tax is levied on cement, ensuring uniformity in tax collection across the country.
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Formula for Price Determination
According to the notification, the FBR has established a clear methodology for determining the minimum retail price of cement for a given month. The fixed price will be calculated based on the average of the following:
Retail prices of cement in Karachi, Lahore, Faisalabad, and Peshawar.
The average retail prices in Rawalpindi and Islamabad.
These prices are to be sourced from data published by the Pakistan Bureau of Statistics (PBS) on its official website during the preceding month. Once this average is determined, it will be reduced by twenty-five rupees (Rs25) to arrive at the final fixed minimum retail price for sales tax purposes.
Purpose and Scope
The notification clarifies that this fixed minimum retail price will be specifically used for the payment of sales tax, at the rate stipulated in clause (a) of sub-section (2) of section 3 of the Sales Tax Act.
This mechanism indicates the FBR’s ongoing efforts to streamline tax collection processes and prevent potential revenue leakages by providing a consistent and transparent benchmark for sales tax assessment on cement.
