Is bread, naan or roti from a bakery or tandoor exempt from sales tax?

Bread, naan and roti supplied within Pakistan are exempt from federal sales tax. The exemption is serial 54 of Table-2 of the Sixth Schedule to the Sales Tax Act, 1990, and section 13(1) is what gives Sixth Schedule entries their effect. The entry is short and broad, but it names only breads, nans and chapattis, so other bakery products need their own answer.

What does the law say?

Section 3(1) of the Sales Tax Act charges sales tax at eighteen per cent of the value of taxable supplies. Section 13(1) then says that, notwithstanding section 3, the supply or import of goods specified in the Sixth Schedule “shall, subject to such conditions as may be specified by the Federal Government, be exempt from tax under this Act”.

Table-2 of the Sixth Schedule is headed “Local Supplies only”. Serial 54 reads:

Serial	Description	Heading
54	All types of breads, nans and chapattis	Respective headings

A footnote in the consolidated Act says serials 52 to 54 were added by the Finance Act, 2022. Note 1 to the Schedule says exemption is admissible on the basis of the description of goods in column 2, and the customs headings are given for reference and classification only.

What does “all types” cover, and what does it not?

The words “All types” and the absence of any exclusion matter. Serial 54 does not exclude:

• bread sold under a brand name;
• bread sold by a Tier-1 retailer or in a mall;
• factory-made bread as opposed to a tandoor’s naan.

The contrast is visible in the same table. Serial 56 exempts milk but excludes milk “sold under a brand name” or supplied by corporate dairy farms. Serial 54 has no such words.

What serial 54 does not reach:

Product	Where the Act deals with it
Buns, rusk, sheer mal, vermicelli	Eighth Schedule, Table-1, serial 87: local supply at 10%, “excluding those sold in bakeries, and sweet shops falling in the category of Tier-1 retailers”
Cakes, pastries, mithai	Not named in serial 53 or 54 of Table-2
Imported bread	Table-2 is for local supplies only

A footnote says serials 84 to 88 of the Eighth Schedule were inserted by the Finance Act, 2024.

Worked example (illustrative figures)

Bilal runs a registered bakery in an air-conditioned shopping mall in Rawalpindi, which makes him a Tier-1 retailer under section 2(43A)(b). His made-up sales for one day:

Item	Sales	Treatment
Double roti and naan	Rs. 40,000	Exempt, serial 54
Buns and rusk	Rs. 10,000	Not serial 54; serial 87 excludes bakeries that are Tier-1
Cakes	Rs. 20,000	Not serial 54

Step 1: the bread and naan carry no sales tax. Rs. 40,000 x 0 = Rs. 0.

Step 2: the buns and rusk fall outside serial 87 because Bilal’s bakery is a Tier-1 retailer. That entry does not itself give a rate for the excluded case. If the general rate in section 3(1) applies with no other provision reducing it, the tax is Rs. 10,000 x 18% = Rs. 1,800.

Step 3: the cakes are not in serial 54. On the same assumption, Rs. 20,000 x 18% = Rs. 3,600.

Had Bilal’s bakery not been a Tier-1 retailer, serial 87 would describe the buns and rusk at 10%: Rs. 10,000 x 10% = Rs. 1,000. How a non-Tier-1 retailer actually pays sales tax is a separate question.

What if …?

What if I run a tandoor that sells naan and roti only? Serial 54 covers nans and chapattis of all types on local supply. It does not depend on the size of the business or on registration.

What if I am registered and integrated with FBR? The exemption still applies, but rule 150R(9) of the Sales Tax Rules, 2006 says electronic invoices for exempt items are also issued through the integrated system.

What if I serve naan with a meal in my restaurant? Prepared food supplied by restaurants and caterers has its own exemption from federal sales tax at serial 53. A restaurant bill may still carry a tax on the service under the ICT (Tax on Services) Ordinance in Islamabad or provincial law elsewhere.

Common mistakes

• Assuming branded bread is taxable. Serial 54 has no brand exclusion.
• Treating buns and rusk as “bread”. They have their own entry at serial 87 of the Eighth Schedule.
• Treating the exemption as a reason not to invoice. Rule 150R(9) applies to exempt items for integrated persons.
• Applying serial 54 to imports. Table-2 is for local supplies only.

What to check in the official text

Read section 13 and Table-2 of the Sixth Schedule, including its Notes, and serial 87 of Table-1 of the Eighth Schedule, in the Sales Tax Act, 1990 as amended to 30 June 2026. Section 13(1) makes the exemption subject to conditions the Federal Government may specify, so check for any notification attaching conditions to serial 54.