VAT on superstores: No extra charge on MRP, clarifies NBR
the NBR said superstores paying VAT at the standard 15% rate are eligible for an input tax rebate, provided they comply with other legal provisions
The National Board of Revenue (NBR) has clarified that superstores cannot charge additional money from consumers if they sell goods at the maximum retail price (MRP), as the value-added tax (VAT) is already included in the price.
In an instruction letter issued recently, the NBR said superstores paying VAT at the standard 15% rate are eligible for an input tax rebate, provided they comply with other legal provisions.
However, those paying VAT at the reduced 7.5% rate are not entitled to any rebate.
The directive aims to regulate product prices, protect consumer rights, facilitate trade, and implement a structured VAT system, the NBR said.
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The NBR defines a super-shop as an independent and complete shop, whether air-conditioned or not, regardless of its size, where fresh, germ-free, and preservative-free fish, meat, rice, lentils, vegetables, fruits, and other household and decorative products are sold using modern scientific technology.
The Value Added Tax and Supplementary Duty (Amendment) Ordinance, 2025, has raised the VAT rate for businesses from 5% to 7.5%, effective from 9 January 2025. Consequently, superstores are now subject to a 7.5% VAT rate.
Under the Value Added Tax and Supplementary Duty Act, 2012, registered businesses can opt to pay a 15% VAT instead of the reduced rate or specific tax outlined in the Third Schedule.
If a superstore chooses the 15% VAT rate, it can claim an input tax rebate without needing to submit an input-output coefficient declaration, provided all other legal conditions are met.
