The Federal Board of Revenue (FBR) made it obligatory for all the registered retailers to list prices along with the tax – the tax amount should be mentioned separately on the price tags and (if available) menu cards to ensure depositing of deducted tax in government’s account.
The decision was predominantly made, keeping those retailers who are selling fabrics in local markets and charging sales tax at the rate of 17 per cent on retail price without mentioning it on the price tag.
Since July 2019, the government has set a standard rate of 17pc sales tax on sales of textile domestically, including clothing, leather garments, and other leather essentials. However, there is no sales tax charged on exports of these products.
Now to ensure that the sales tax collected from consumers goes into the government kitty, the FBR has made it mandatory for all retailers to mention prices without and after tax on the price tags, especially for finished fabrics and locally manufactured textile made-ups.
The FBR introduced a new Rule 150ZEA in the Sales Tax Rules, it also made it necessary for all eateries including caterers, restaurants, bakeries, and those shops who are supplying readymade food and sweetmeats to show prices and amount of tax separately on their menu cards – both boards displayed outside and those given to the end visitors.
The decision will help FBR to monitor and trace taxable activities through electronic means.