The Ministry of Finance is expected to broaden the Third Schedule of the Sales Tax Act in the upcoming 2026–27 budget by including more fast-moving consumer goods (FMCG) under the Maximum Retail Price (MRP)-based taxation system.
The move aims to boost sales tax collection through improved transparency, simplified tax administration, and reduced leakage. The MRP-based model has already delivered strong results, with products like coffee showing significant gains in documented revenue after being brought under this system.
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Under the proposed expansion, several commonly used consumer items may be added, including edible oil, milk and dairy products, infant formula, tea whiteners, sauces, frozen foods, and wheat flour. By taxing these items based on their printed retail prices, authorities hope to strengthen compliance across the supply chain and ensure better visibility of actual sales.
This initiative reflects the government’s broader strategy to enhance revenue collection without increasing tax rates, instead focusing on documentation and efficiency within the existing taxation framework.
