The Federal Board of Revenue (FBR) has decided to charge sales tax on supply of mineral water, taking into account the printed retail price, in the upcoming budget (2015-16). A penalty of Rs 50,000 has been proposed for business and trade not declaring/printing retail price on their products. It is learnt that the government in upcoming Finance Bill intends to bring mineral water under Third Schedule of the Sales Tax Act, 1990.
According to the details, standard rate of sales tax on supply value of the product is chargeable in case of "mineral water". The government intends to make a new entry "Mineral Water" in the third schedule of the Sales Tax Act., 1990 which deals with items chargeable to sales tax on its retail price. It is important to note that by virtue of the amendment though the rate of sales tax will remain same and no rate increment will apply, but still due to application of higher price chargeable to end consumer of the product, the government is likely to collect higher sales tax. The persons dealing in items falling under Third Schedule are also liable to mention retail price in their article, bottle or product, sources informed. The government in a connected amendment also intends to provide specific amount of penalty for not declaring retail price on their product. In this regard a penalty of Rs 50,000 is proposed to be inserted under section 33 of the Sales Tax Act, 1990.