Third Schedule Goods Under FBR in 2026: New Categories, Footwear and Retail Price Rules
FBR's Third Schedule was expanded in 2026 to include footwear, cosmetics, edible oils and more. Understand the retail-price tax rules, how to invoice these goods, and what changed.
What the Third Schedule is
The Third Schedule to the Sales Tax Act 1990 lists goods where sales tax is charged at 18 percent of the printed retail price, not on the transaction value. This means the tax base is the MRP (maximum retail price) displayed on the product, regardless of any trade discount the seller gives.
For digital invoicing, this changes how you fill in the invoice: the tax-relevant field is fixedNotifiedValueOrRetailPrice (the retail price), not valueSalesExcludingST (which is set to zero).
What changed in 2026: new categories added
The Finance Act 2026 substantially broadened the Third Schedule. New additions include footwear of all types (Serial No. 65), edible oils, confectionery, sauces, sanitary ware, plastic household products, cosmetics, household utensils, and ceramic products.
This expansion affects manufacturers, importers, and retailers dealing in any of these categories — they must now invoice these items using the retail-price method in FBR's digital invoicing system.
Mandatory price display requirements
For all Third Schedule goods, the retail price and the amount of sales tax must be legibly, prominently and indelibly printed or embossed on each article, packet, container, package, cover or label — by the manufacturer for domestic goods, or by the importer for imported goods.
FBR has been actively cracking down on businesses that hide or obscure retail prices. Two committees have been formed under the Inland Revenue Wing specifically to address pricing-display compliance for both imported and domestic Third Schedule goods.
Footwear: the biggest new addition
Footwear of all types is now covered under Serial No. 65 of the Third Schedule, except where the manufacturer exclusively sells through FBR digitally-integrated and POS-compliant retail outlets. Footwear manufacturers and importers who do not meet this exception must apply the retail-price-based 18 percent tax.
Industry associations have raised concerns that this may push smaller players into the informal sector, but FBR's position is clear: compliance is mandatory, and digital invoicing is the mechanism for enforcement.
How to invoice Third Schedule goods in Digi Invoice
In Digi Invoice, select the sale type as '3rd Schedule Goods' (FBR scenario SN008 in sandbox). Enter the retail price in the 'Fixed/Notified Value or Retail Price' field and set the sales value excluding ST to zero. The system calculates the 18 percent tax on the retail price automatically.
For retailers selling Third Schedule goods to end consumers, use scenario SN027. Digi Invoice handles the field mapping, tax calculation, and FBR validation for both scenarios — you do not need to remember the formula.