FBR Sets Minimum Retail Prices for Ghee, Cooking Oil to Curb Tax Evasion

ISLAMABAD: The Federal Board of Revenue (FBR) has fixed minimum retail prices for ghee and cooking oil, with September 2026 prices ranging from Rs500 to Rs588 per kilogram/litre, to curb tax evasion and ensure sales tax collection on realistic market values.

The FBR has issued a notification under the Sales Tax Act, 1990, prescribing minimum values for locally manufactured vegetable and animal fats and oils, ghee and cooking oil. Going forward, sales tax on these products will be collected on the prescribed minimum retail prices, subject to the conditions set out in the notification.

According to the notification, the minimum retail price will be determined on the basis of the average national retail price published in the weekly Sensitive Price Indicator (SPI) by the Pakistan Bureau of Statistics (PBS) during the last week of the preceding month.

The FBR has allowed a deduction of Rs25 per kilogram from the average national retail price for determining the minimum taxable retail price. However, the Rs25 per kilogram deduction will be available only to registered persons who are compliant with the FBR’s digital invoicing and production monitoring systems.

The notification has divided ghee and cooking oil brands into three categories for determining their minimum retail prices.

Category A includes Daldа, Habib, Sufi, Meezan, Soya Supreme and Eva. The minimum price for these brands has been fixed at 100 percent of the average national retail price, subject to the applicable Rs25 per kilogram deduction for eligible registered manufacturers.

Category B includes Manpasand, Habib Handi, Seasons, Kashmir, Kausar, Shah Taj, Kissan, Shafaq and Sultan. The minimum retail price for these brands has been fixed at 93 percent of the average national retail price, subject to the applicable conditions.

Category C covers all other brands, with the minimum retail price set at 85 percent of the average national retail price.

For August 2026, the FBR calculated the average national retail price at Rs613 per kilogram/litre based on prices published on the PBS portal on July 26, 2026. After applying the Rs25 per kilogram deduction, the minimum retail price was determined at Rs588 per kilogram/litre.

For September 2026, the minimum retail prices have consequently been fixed at Rs588 for Category A, Rs547 for Category B and Rs500 for Category C.

The FBR said the minimum retail price for subsequent months would also be determined using the same mechanism, based on the relevant PBS average national retail prices.

The notification further states that where the products are supplied at a price higher than the prescribed minimum retail price, sales tax will be charged on the higher actual price.

The measure is aimed at preventing under-invoicing and ensuring that sales tax is collected on values that more closely reflect prevailing retail prices in the ghee and cooking oil market.

The FBR notification will remain applicable up to the tax period of November 2026.