ISLAMABAD: The Federal Board of Revenue (FBR) has allowed manufacturers and suppliers of edible oil and ghee to adjust input tax up to 95% of output tax for the relevant tax period, subject to specified compliance requirements.
The FBR issued SRO 1631(I)/2026 dated September 18, 2026, amending its earlier notification SRO 1190(I)/2019 dated October 2, 2019, under the Sales Tax Act, 1990.
The latest notification was issued under the powers conferred by the second proviso to sub-section (1) and sub-section (4) of Section 8B of the Sales Tax Act, 1990.
FBR sets conditions for 95% input tax adjustment
Under the amendment, the FBR has added a new entry to Table-2 of SRO 1190(I)/2019.
The facility applies to registered persons engaged in the supply of oil and ghee who meet the prescribed conditions.
Eligible businesses must:
• Comply with the FBR’s digital invoicing and production monitoring system;
• Be engaged in the supply of oil and ghee; and
• Pay sales tax at the retail price in accordance with Serial No. 56 of the Third Schedule to the Sales Tax Act, 1990.
The facility will remain available until November 30, 2026.
Excess input tax to be carried forward
Under SRO 1190(I)/2019, the FBR had allowed specified registered persons to adjust input tax up to 95% of output tax for the relevant tax period.
Where admissible input tax exceeds the permitted adjustment limit, the excess amount is carried forward to the following tax period.
The latest amendment extends this 95% input tax adjustment facility to compliant oil and ghee businesses meeting the conditions prescribed by the FBR.
Digital compliance linked to tax facility
The measure links the input tax adjustment facility with compliance with the FBR’s digital invoicing and production monitoring requirements.
It specifically covers oil and ghee businesses liable to pay sales tax at retail prices under the Third Schedule to the Sales Tax Act.
Oil and ghee manufacturers and suppliers seeking to avail themselves of the facility will therefore need to maintain compliance with the applicable digital invoicing and production monitoring requirements during the period covered by the notification.
