Section 113 Minimum Tax: The 0.5% Rate for Specified Trade Channels

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A wholesaler's business label is only the first part of the 0.5% minimum-tax test. Clause 24D also identifies the goods and requires the beneficiary to appear on both the income-tax and sales-tax active taxpayers' lists.

Which goods are listed?

The substituted table includes pharmaceuticals, fertilizer, cigarettes, sugar, locally manufactured mobile phones, packaged or canned fresh and frozen food, electronics, beverages and dairy products. It also lists specified packaged food, condiments and baking items, personal-care products, cleaning agents, paper hygiene products, and items such as trash bags, aluminium foil, air freshener and insect sprays. Match actual product lines to the statutory descriptions rather than stretching a general label to cover all inventory.

Apply the rate to the right taxpayer and base

The concession sets the section 113(1) minimum-tax rate at 0.5% for the specified distributors, dealers, sub-dealers and wholesalers. It is not a universal rate for manufacturers, retailers or all traders. Section 113 applicability and the correct turnover base still need to be established.

If Rs. 100 million is entirely qualifying turnover and all conditions apply, 0.5% gives Rs. 500,000. That arithmetic does not establish the final return liability without comparing the relevant normal-tax position and other applicable provisions.

Mixed product businesses

Keep product-level sales records and evidence of both active-list statuses. Where the business sells both listed and unlisted goods or has more than one role in a supply chain, obtain a supported allocation and legal treatment before applying 0.5% across the entire turnover.

Legislation checked

Finance Act 2026, PDF pages 60-61. Source-text review: 14 October 2026. The Act generally commences on 1 July 2026, subject to express exceptions. Any required implementing notification must also be checked before applying a concession.