FBR Sets Minimum Retail Price for Cement Sales Tax

The Federal Board of Revenue (FBR) has established a minimum retail price for cement, which will be used to calculate sales tax payments within the cement industry.

This revised method for determining the minimum retail price of cement will be effective starting May 1, 2025.

The FBR officially announced this change through the issuance of S.R.O. 746(I) 2025 on Tuesday.

Rationale Behind the Decision

Sources indicate that this action is intended to reduce significant under-invoicing practices by cement producers. The pricing will align with data released by the Pakistan Bureau of Statistics (PBS). The minimum retail price will be based on the average national retail price of cement as most recently reported by the PBS.

According to the official notification, the FBR, exercising its authority under the Sales Tax Act of 1990, has mandated that the minimum retail price be the average national retail price of cement. This price will be sourced from the Pakistan Bureau of Statistics (PBS) website, specifically the weekly sensitive price indicator (SPI). This indicator will be assessed before the 1st and 16th of each month for the corresponding two-week period. This price will be used to determine sales tax payments, in accordance with the rate specified in the Sales Tax Act.

The FBR has confirmed that this notification will be implemented from May 1, 2025.