Register for sale tax in Pakistan

If you are involved in the sale of goods, provision of services, import, or manufacturing, you may be legally required to register for Sales Tax with the Federal Board of Revenue (FBR). Registration enables you to obtain a Sales Tax Registration Number (STRN), comply with tax regulations, and avail benefits such as input tax adjustments and refund claims.

This guide outlines the complete step-by-step process to register for Sales Tax in Pakistan, updated for 2025, along with the documents required and filing obligations after registration.

What is Sales Tax?

Sales tax in Pakistan is an indirect tax levied on the supply, manufacturing, import, or sale of goods and services. It is collected at different stages of the supply chain and is regulated under the Sales Tax Act, 1990.

• The standard rate of sales tax is currently 18%, although certain goods and services may be taxed at different rates or exempted under special schedules.

Who Needs to Register for Sales Tax?

According to the Sales Tax Act, the following entities are required to register:

• Manufacturers

• Importers

• Wholesalers and Distributors

• Retailers (specific sectors)

• Service Providers (e.g., restaurants, ride-hailing services, telecoms)

• Online sellers (under FBR’s updated digital economy regulations)

If your business crosses the threshold of Rs. 10 million annual turnover or is involved in taxable supplies, registration becomes mandatory.

Step-by-Step Process to Register for Sales Tax in Pakistan

Step 1: Obtain a National Tax Number (NTN)

Before registering for Sales Tax, you must first register with FBR and obtain an NTN (National Tax Number). This can be done online via the IRIS portal or by visiting an FBR Tax Facilitation Center.

• Visit: https://iris.fbr.gov.pk

• Upload CNIC, business details, and bank certificate

• Once approved, your NTN will be generated

Step 2: Apply for Sales Tax Registration (STRN)

Once you have your NTN, log into your IRIS account and apply for Sales Tax Registration. Here’s how:

1. Log in to IRIS portal

2. Go to Registration → Form 181

3. Select “Sales Tax Registration”

4. Fill out business details, nature of business, product/service categories

5. Upload required documents

6. Submit the form for FBR review and verification

Required Documents

You’ll need to upload the following documents (scanned in PDF):

• Certificate of Incorporation (for companies) or CNIC (for individuals)

• Business bank account maintenance certificate

• Tenancy agreement or ownership document of business premises

• Utility bill (not older than 3 months) for the business premises

• Email address and mobile number (registered in your name)

• SECP registration certificate (if applicable)

Step 3: Obtain STRN (Sales Tax Registration Number)

After verification of your documents and approval from FBR, you will be issued a Sales Tax Registration Number (STRN).

This number will be used for:

• Filing sales tax returns

• Charging sales tax on your invoices

• Claiming input tax on purchases

• Staying on the Active Sales Taxpayer List

Note: Your NTN and STRN are often the same number, but categorized differently in the FBR system.

Step 4: Receive National Sales Tax Number (NSTN) – If Applicable

Under Pakistan’s new Single Sales Tax Portal, introduced for simplified registration, FBR may issue a National Sales Tax Number (NSTN). This applies to certain sectors including:

• Online platforms

• Service providers

• Freelancers exporting services
  NSTN aims to create unified registration across federal and provincial tax authorities (e.g., PRA, KPRA, SRB, BRA).

Check FBR or SRB guidelines to confirm NSTN applicability to your business.

Post-Registration: Sales Tax Compliance

Once registered, you are legally obligated to:

File Monthly Sales Tax Returns

• Sales Tax Returns (Form STR-7) must be filed monthly, by the 18th of every month

• Declare your total sales, purchases, and input/output tax

• Pay tax due via online payment methods (ADC, mobile banking, internet banking)

Maintain Sales Tax Records

Under the Sales Tax Act, you must maintain:

• Sales invoices with your STRN mentioned

• Purchase receipts

• Input tax records (for tax credit purposes)

• Inventory registers

FBR may audit your records at any time.

Get Integrated with FBR POS System (if applicable)

If you’re a Tier-1 Retailer, you’re required to integrate your Point-of-Sale (POS) system with FBR’s real-time invoice reporting mechanism.

This is mandatory for:

• Large retail chains

• Malls, grocery chains

• Brands with multiple outlets

• Online sellers over a certain threshold

Penalties for Non-Compliance

Failure to register or file sales tax returns can lead to:

• Heavy penalties and fines

• Suspension of NTN or STRN

• Delisting from FBR’s Active Taxpayer List (ST ATL)

• Legal action or prosecution under the Sales Tax Act, 1990

Benefits of Sales Tax Registration

• Access to formal business ecosystem

• Input tax credit on purchases and imports

• Required for corporate clients, tenders, and government contracts

• Eligible for tax refunds and export benefits

• Improved business credibility and compliance standing

• Appearing on the Sales Tax Active Taxpayer List (ST ATL)

Conclusion

Sales Tax Registration is not just a legal requirement — it’s a gateway to building a formal, recognized, and scalable business in Pakistan. Whether you’re a startup, freelancer, retailer, or manufacturer, staying compliant with FBR’s sales tax regulations helps avoid penalties and unlocks growth opportunities.