A Complete Guide to Sales Tax Registration in Pakistan

In a developing country like Pakistan, tax revenue is one of the major sources for meeting government expenditures. The Federal Board of Revenue (FBR) collects a bulk load of tax portions via direct and indirect taxes. However, for lack of proper infrastructure and awareness, a significant portion of tax revenue remains underused. Sales tax is a form of indirect tax in which the final burden of tax liability befalls on the end consumer. It is, however, not the responsibility of the end consumer to deposit it. As a result, a vast majority of laymen have no idea that they are paying such taxes to the government.

Sales Tax Registration in Pakistan

The question arises, who should be registered for sales tax? All importers, wholesalers, dealers, and distributors, manufacturers, retailers, persons making zero-rated supplies (exporters), and any other person required by law should be registered for sales tax.

Documents Required for Sales Tax Registration

Businesses can be registered via Form 14(1) on the Iris portal of FBR with the following documents:

  1. Bank account certificate
  2. GPS tagged photograph
  3. Consumer number and recent paid utility bill copy and picture of the utility meter
  4. Details of business including forming dates and business activity

After completing the above steps, make biometric verification via any e-Sahulat center within 30 days for the completion of the registration process.

Sales Tax Return Due Dates

Sales tax returns are due on the 18th of each subsequent month. For example, the due date for March return will be April 15th. All the ancillary forms and annexures are submitted. In addition to FBR returns, businesses are required to register for provincial tax authorities if the business has branches in other provinces, etc.

Conclusion

Sales tax registration is mandatory for all businesses falling under the specified criteria. With the provided guide, businesses can easily register for sales tax and avoid any penalties or fines. Registering for sales tax not only complies with the law but also plays a crucial role in the country’s development by contributing to tax revenue.

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