Can a shopkeeper charge sales tax on top of the printed retail price, and who is liable if no price is printed?

For branded, packaged goods in the Third Schedule, the Sales Tax Act fixes both the tax base and who prints it. The shopkeeper does not set the retail price for tax; the manufacturer or importer does, and the tax figure goes on the pack with it.

What does the law say about the printed price?

Section 3(2)(a) of the Sales Tax Act, 1990 charges goods listed in the Third Schedule at eighteen percent of the retail price (or at Eighth Schedule rates where the goods are also listed there). It then requires that “the retail price thereof, along with the amount of sales tax” be printed or embossed by the manufacturer, or the importer for imported goods, on each article, packet, container, package, cover or label.

Section 2(27) defines the retail price as the price fixed by the manufacturer or importer, “inclusive of all duties, charges and taxes (other than sales tax)”, at which the brand or variety is sold to the general body of consumers. Where more than one price is fixed for the same brand or variety, the highest one counts. A proviso lets the Board specify zones or areas for working out the highest retail price.

Put together: the pack should carry the retail price and the sales tax on it, and the tax is eighteen percent of that printed retail price.

Can the shopkeeper add sales tax on top?

Section 3 sets the tax on Third Schedule goods as eighteen percent of the retail price and requires that amount to be printed. Nothing in section 3 provides for a further sales tax charged by the retailer on the same retail price. If a shop does collect more, section 3B applies. Under section 3B(1), any person who collects any tax or charge that was not payable, or that is in excess of what is actually payable, and passes the incidence on to the consumer, must pay the amount collected to the Federal Government. This applies whether it was collected “under misapprehension of any provision of this Act or otherwise”.

Section 3B(2) makes that amount an arrear of tax, recoverable as such, and bars any refund claim for it. Section 3B(3) puts the burden of proving whether the tax was passed to the consumer on the person who collected it.

Section 3B makes the collector pay the excess to the government. It does not itself provide a route for the shopper to get the money back.

What about cold drinks sold at a higher price?

The second proviso to section 2(27) deals with chilling charges on aerated water, beverages, mineral water and fruit juices. It says the reduction in price on account of chilling or similar charges shall not be more than five percent of the price inclusive of sales tax, federal excise duty and other taxes (except income tax) at which the goods are actually sold. The proviso is about working out the retail price for tax. It does not say in plain terms whether, or by how much, a shop may charge above the printed price for a chilled drink.

Who is liable if no price is printed?

The duty to print falls on the manufacturer, or the importer for imported goods, under section 3(2)(a). Serial 26 of the table in section 33 is the matching penalty. It covers a manufacturer or importer of an item taxed on the basis of retail price who fails to print the retail price in the manner the Act requires:

Consequence	Amount
Penalty	Rs. 10,000 or five percent of the amount of tax involved, whichever is higher
Goods	Liable to confiscation, as may be prescribed
Redemption	Allowed on payment of a fine of not less than twenty percent of the total retail price of the goods

Serial 26 names the manufacturer or importer, not the retailer. The Act’s general rule on liability, in section 3(3)(a), makes the tax on a supply of goods the liability of the person making the supply. The provisions read for this page do not set a separate penalty on a retailer for selling Third Schedule goods that carry no printed price.

Worked example (illustrative figures)

A shampoo bottle in a Rawalpindi general store is printed “Retail price Rs. 600, sales tax Rs. 108”.

1. Tax under section 3(2)(a): 18% x Rs. 600 = Rs. 108. The printed figures match.
2. The shop charges Rs. 600 + Rs. 108 = Rs. 708, and then adds a further 18% on Rs. 708 = Rs. 127.44, billing Rs. 835.44.
3. The Rs. 127.44 is not payable as tax under section 3. If it was passed to the customer, section 3B(1) requires the shop to pay Rs. 127.44 to the Federal Government.

Now suppose a carton of 1,000 bottles reaches the market with no retail price printed, and the tax involved is Rs. 108,000. Five percent of Rs. 108,000 is Rs. 5,400, which is lower than Rs. 10,000, so the manufacturer’s penalty under serial 26 is Rs. 10,000. If the goods are confiscated, redemption needs a fine of at least 20% x Rs. 600,000 = Rs. 120,000.

Common mistakes

• Treating the printed retail price as tax-inclusive. Section 2(27) excludes sales tax from the retail price; the tax is printed alongside.
• Believing a shop keeps overcharged tax. Section 3B sends it to the Federal Government.
• Blaming the retailer for a missing price. Serial 26 is aimed at the manufacturer or importer.

What to check in the official text

Read sections 2(27), 3(2)(a), 3(3) and 3B, serial 26 of the section 33 table, and the Third Schedule of the Sales Tax Act as amended to 30 June 2026. Check any Board order specifying zones for the highest retail price and any notification fixing retail prices under the provisos to section 2(27). These are not held in this corpus. Provincial consumer protection laws on overcharging are outside this corpus.