Prices of Packaged Milk and Related Products Expected to Decline by Up to 3%; Retail Price Will Now Be Printed on Packaging
KARACHI: The federal government has amended the sales tax schedule and included a number of products in the Third Schedule. These products include packaged milk, dairy products, sweets, jam, jelly, ketchup, spices, edible oil, ghee, crockery, hair oil, shampoo, footwear, perfumes, body sprays, bakery items, plastic household goods, and sanitary products.
The inclusion of packaged milk and dairy products in the Third Schedule will eliminate the additional sales tax imposed on these items. According to industry sources, dairy products were previously subject to 18 percent sales tax along with an additional 3 percent sales tax. As a result, the total sales tax burden on milk-based products reached 21 percent.
Under sales tax laws, the additional sales tax was supposed to be paid by retailers. However, retailers were refusing to pay this tax, while the government collected it from manufacturers at the time milk and other dairy products left the factory. Consequently, retailers were not effectively bearing the tax burden, while the price of milk increased by 3 percent.
With the inclusion of milk and related products in the Third Schedule, this additional 3 percent tax has been abolished. Moreover, milk packaging companies will no longer have any justification for not printing the retail price on product packaging.
