Sales Tax Registration: What Every Business Owner in Pakistan Needs to Know

Introduction
Running a business in Pakistan comes with responsibilities—one of the most important is sales tax registration. Whether you’re selling goods, providing services, or both, understanding the rules for sales tax in Pakistan is key to staying compliant and avoiding penalties.

This guide breaks down everything business owners need to know, including the difference between sales tax on services and sales tax on goods, who needs to register, and how a sales tax consultant can make the process easier.


What is Sales Tax in Pakistan?

Sales tax is a consumption tax imposed on the sale of goods and services. In Pakistan, it is regulated by the Federal Board of Revenue (FBR) and the provincial revenue authorities (e.g., PRA, SRB, KPRA, BRA ). Businesses that exceed a certain turnover threshold or are engaged in taxable activities are required to register for sales tax.


Sales Tax on Goods vs. Sales Tax on Services

Sales Tax on Goods

  • Collected by the Federal Board of Revenue (FBR).
  • Applicable to manufacturers, importers, wholesalers, and retailers.
  • Example: Electronics, textiles, and packaged food items.

Sales Tax on Services

  • Collected by provincial revenue authorities (e.g., Sindh Revenue Board or Punjab Revenue Authority).
  • Applies to businesses in hospitality, consultancy, digital marketing, etc.
  • Example: A freelance designer or IT service provider in Karachi is subject to sales tax on services through SRB.

Who Needs to Register for Sales Tax?

You must register for sales tax if:

  • Your annual taxable turnover exceeds the threshold set by FBR or provincial authorities.
  • You are engaged in manufacturing or importing taxable goods.
  • You provide taxable services (even if online).
  • You want to claim input tax credits on purchases.

Benefits of Sales Tax Registration

  • Legal compliance
  • Eligibility to issue tax invoices
  • Ability to claim input tax adjustments
  • Enhanced credibility with vendors and clients
  • Participation in government contracts

Step-by-Step Sales Tax Registration Process

  1. Create an Account on FBR’s Iris Portal
  2. Submit Sales Tax Registration Form
    • Enter your business profile, CNIC, address, and nature of service/goods.
  3. Attach Required Documents
    • CNIC copy, utility bill, bank account certificate, and business ownership proof.
  4. Verification & Issuance
    • After verification, your Sales Tax Registration Number (STRN) will be issued.

For sales tax on services, registration must be done separately with the relevant provincial authority.


Why Hire a Sales Tax Consultant?

The tax landscape in Pakistan can be complex, especially with dual authorities (federal and provincial). A certified sales tax consultant helps you:

  • Choose the right registration authority
  • File monthly sales tax returns
  • Avoid legal penalties
  • Optimize input tax credits

They are particularly useful if you operate in multiple provinces or deal with both goods and services.


Conclusion

Sales tax registration is not optional—it’s essential. Whether you’re selling products or offering services, understanding how sales tax in Pakistan works helps you stay compliant, organized, and ready for growth. From navigating sales tax on goods to understanding provincial rules for sales tax on services, getting expert guidance is always a smart move.

Need help? Talk to our experienced sales tax consultants and get registered the right way—without stress or delays.

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