Sales tax is an indirect tax applied to the sale of goods and certain services. If your business falls into any of the following categories, you need to register for sales tax with the Federal Board of Revenue (FBR):
- You sell taxable goods or services
- Your annual turnover exceeds PKR 7.5 million (for retailers)
- You operate as a manufacturer, importer, exporter, or distributor
- You provide services that are taxable under provincial laws (such as through Punjab Revenue Authority, Sindh Revenue Board, etc.)
How to Register for Sales Tax in Pakistan
Sales tax registration may sound daunting, but the process is quite straightforward. Here’s how you can do it:
Step 1: Register Online via IRIS
FBR’s online portal, IRIS, is the go-to platform for sales tax registration. Simply create an account and fill out the application form.
Step 2: Gather Your Documents
Before you start, make sure you have the following documents:
- Your CNIC (for individual business owners)
- National Tax Number (NTN)
- Business bank account details
- Proof of business premises (rental agreement or ownership documents)
- A working email and mobile number registered with the FBR
Step 3: Verification Process
Once you submit your application, the FBR will review the provided information. In some cases, they may conduct a physical verification of your business premises.
Step 4: Get Your Sales Tax Registration Number (STRN)
If everything checks out, you’ll receive your Sales Tax Registration Number (STRN). This unique number allows you to collect sales tax from your customers and file tax returns.
Step 5: File Monthly Sales Tax Returns
Once registered, you must submit monthly sales tax returns via the FBR’s online portal. The general sales tax rate in Pakistan is 17%, but specific industries may have different rates or exemptions.
Sales Tax Jurisdictions: Federal vs. Provincial Taxes
Sales tax isn’t just a federal matter—it also applies at the provincial level. Here’s what you need to know:
1. Federal Sales Tax (FBR)
The FBR handles sales tax on goods at the national level. If you’re involved in manufacturing, importing, or exporting, this is where you register.
2. Provincial Sales Tax on Services
If you provide services, you’ll need to register with the relevant provincial tax authority:
- Punjab Revenue Authority (PRA) – Handles service tax in Punjab
- Sindh Revenue Board (SRB) – Regulates service tax in Sindh
- Khyber Pakhtunkhwa Revenue Authority (KPRA) – Covers services in Khyber Pakhtunkhwa
- Balochistan Revenue Authority (BRA) – Manages service tax in Balochistan
3. E-Commerce and Digital Sales Tax
If you sell online or provide digital services, you must comply with Pakistan’s digital tax regulations. E-commerce sellers and online platforms are now required to register and collect sales tax just like traditional businesses.
Final Thoughts
Sales tax registration might seem like a hassle, but it’s essential for running a legitimate business in Pakistan. It keeps you compliant, avoids legal troubles, and allows you to grow your business with confidence.
Need help? ActiveTaxpayers.com is here to guide you through the process with expert support and easy solutions!
