Sales Tax registration

Sales tax registration is mandatory for the persons importing or supplying goods (complete criteria is also mentioned below) and the FBR has provided now the option to get your business registered in sales tax through online service whereby you can get sales tax registration of your business entity quite easily for which our services would help a lot to get your business timely registered in sales tax with FBR.
Before getting the process of Registration, it is appreciated that one should understand the basics regarding sales tax. Understanding of basic concepts will not only make sure that the tasks have been done easily but also in the prescribed way.

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What is sales Tax?

Sales tax is defined as;

Sales Tax is a tax levied by the Federal Government under the Sales Tax Act, 1990, on sale and supply of goods and on the goods imported into Pakistan. Sales Tax on services is levied by the Federal Government under The Islamabad Capital Territory (Tax on Services) Ordinance,2001

Sales tax can be levied in following two ways;

Input Tax

A tax which is paid by the registered person on the taxable goods acquired or purchased and services received by him during the period. This also contains the sales tax paid on imports at the import stage.

Output Tax

A tax which is imposed or levied on the supply of goods or services rendered on which sales tax is applicable.

Scope of sales tax

Sales tax is applicable on the following:


All the goods are taxable with the exception of those which have been exempted under section 13 as stated under 6th Schedule of the Sales Tax Act, 1990. For the sake of sales tax, goods include each kind of movable property other than actionable claims, money, stocks, shares and securities.

Imports into Pakistan

All imported goods into Pakistan are to be offered for sales tax at the import stage, except those goods which are particularly exempted under section 13 as mentioned in Sixth Schedule to the Act.

What is sales tax registration number in Pakistan?

Sales tax registration number is defined below as;

‘’A sales tax registration number is a number allocated by the government of Pakistan for taxation paid to a prevailing body for the sale of specific goods and services. Normally laws permit the seller to receive funds as taxes from the consumer at the point of purchase’’.

Sales Tax Registration basics

  • Before going to file the Sales Tax Return, it is essential to have registration in sales tax with the Federal Board of Revenue (FBR).
  • After having registration with FBR, you will be issued a Sales Tax Registration Number (STRN) and User ID and Password. By using that User ID and Password, the registered person has access to e-file portal for filing the Sales Tax Returns.
Sales Tax Return can only be submited via e-file portal of FBR when filing Online.

Who is required to register for sales tax in Pakistan?

Following persons are liable to be registered for sales tax in Pakistan;
  • All importers
  • All wholesalers (including dealers) and distributors
  • Manufacturers with the exception of cottage industry. {Cottage industry means a manufacturer whose taxable supplies produce an annual turnover during the last twelve months ending any tax period does not exceed [ten] million rupees or whose annual utility (electricity, gas and telephone) bills during the last twelve months ending any tax period do not exceed [eight] hundred thousand rupees;}
  • Retailers (Tier-1 retailers means:
  • A retailer operating as a unit of a national or international chain of stores;
  • A retailer operating in an air-conditioned shopping mall, plaza or center, excluding kiosks;
  • A retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rupees six hundred thousand; and
  • A wholesaler-cum-retailer, involves in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers
  • A person required under any Federal or Provincial Law to get itself registered for the purpose of any tax or duty collected or paid as if it were an applicability of sales tax, e.g. service providers like caterers, customs agents, hotels, clubs, ship chandlers, courier services, stevedores, etc.
  • Persons making zero-rated supplies, comprising commercial exporter who plans to get sales tax refund against his zero-rated supplies.
  • A person who is liable for registration by virtue of aforementioned standards, but still does not register, then the department can compulsorily register it, after suitable investigation, under sub- rule 1 of Rule 6 of Sales Tax Rules, 2006.

Mandatory Documents for Sales Tax Registration in Lahore

Documents required for sales tax registration are listed below;
  1. Bank Account Maintenance Certificate having IBAN Number
  2. Electricity Bill of Business Premises
  3. Photo of Business Premises

The process for Sales Tax Registration in Lahore

Procedure for sales tax registration is discussed below;
  • The person shall use credentials of his Iris Portal to login.
  • After log-in, the person shall select Form 14(1) (Form of Registration filed voluntarily through Simplified) (Sales Tax) from the drop-down menu of Registration.
  • On selection of Form 14(1), i.e. the Form of Registration filed voluntarily through Simplified. (Sales Tax), the person will be required to fill in the following detail:
    • Tax Period
    • Information of Sales Tax in case of;
      1. Individual, the type of registration, either it is a Manufacturer or Non-Manufacturer.
      2. AOP or Company, CNIC of the Member/Director/Principal Officer with the registration type, either it is a Manufacturer or Non-Manufacturer
    • CNIC of the Member or Director or Principal Officer along with the type of registration.
    • Detail of Bank Account that includes the Bank Account Certificate furnished by the bank in the name of the respective company's business
    • Detail of business including Business Name, Capacity, Acquisition date and Business operations along with the detail of all branches of business in case of multiple branches at different locations.
    • GPS-tagged photos of the business premises
    • Registration number with the gas and electricity supplier along with the images of utility meter
    • GPS-tagged photos of machinery and industrial electricity or gas meter installed in case of a manufacturer
The person shall be registered under sales tax by the system on submission of the aforementioned detail and documents.

Bio Metric Verification

After obtaining the registration Number, the Applicant is required to have biometric verification by visiting E-Sahulat Centre of NADRA within thirty days.
If verification fails, the name of registered person is withdrawn from the Active Taxpayer list of Sales Tax.
Post Verification Manufacturer
The Board may need post verification for manufacturer via field offices, or a third party authorized by the Board. If the provided documents with an application are not original, fake or misleading, it may request by the system, to give the short specifics, in fifteen days. Persons failing to provide the same are excluded from the Active Taxpayer List of Sales Tax.
Sales Tax Registration via Iris Mobile Application
Sales Tax Registration can also be applied via Iris Mobile Application i.e. Tax ASAAN Mobile Application.

Changes in particulars of Registration

If a change is required in the profile with FBR or any other detail as mentioned in the certificate of registration, then the registered person shall inform the changing or modification in the prescribed form to the RTO within fourteen days of this change.

Transfer of Registration

If a registered person transfers his business activity from one Jurisdiction to another Jurisdiction, then he will be required to provide a valid justification for this change of Jurisdiction and it may be filed through a written Application to Commissioner Inland Revenue of RTO where the said case presides.

Benefits of Sales Tax Registration in Lahore

Single indirect tax.
More savings.
Ease of doing business.
Employment growth.
GDP growth.
Drop in tax evasion.
Revenue increment.
Trade and industry growth.

De Registration of Sales Tax

In order to de register, the registered person will submits an application to the Commissioner Inland Revenue, having Jurisdiction to deal with the case.
Following persons can make an application for de registration:
  • Registered Persons who cease to carry on their business
  • If supplies of the registered person become exempt from Sales Tax, or the turnover for the prescribed time period becomes lower than the minimum threshold level.