New Sales Tax General Order allows exploration and production companies to issue digital invoices through operators, with compliance starting from December 2026.
ISLAMABAD: The Federal Board of Revenue (FBR) has introduced a simplified procedure for oil and gas exploration and production (E&P) companies to issue electronic sales tax invoices and integrate their invoicing systems with the tax authority’s computerised system.
Through Sales Tax General Order (STGO) No. 36 of 2026, issued under IR Operations, the FBR has addressed difficulties faced by E&P companies in complying with mandatory electronic invoicing requirements.
The order, titled Sales Tax General Order for Digital Invoicing Compliance, 2026 for E&P Companies, will apply to sales tax returns for December 2026 and subsequent months.
The FBR issued the directive under Section 55, read with Section 23 of the Sales Tax Act, 1990, which empowers the board to require registered taxpayers to integrate their electronic invoicing systems for real-time reporting of sales.
The electronic invoicing framework is also governed by Chapter XIV of the Sales Tax Rules, 2006, introduced through SRO 69(I)/2025 and subsequently expanded through SRO 1852(I)/2025.
Digital invoicing procedure for E&P companies
Under the new procedure, each joint venture partner operating under a Petroleum Concession Agreement (PCA) will issue a digital invoice for its respective share based on the invoice issued by the operator of the relevant PCA or lease.
However, non-operating partners will be allowed to submit or upload sales tax invoices issued on their behalf by the operator. This facility will enable the generation of a unique invoice number and QR code through the FBR’s computerised system.
The operator will continue issuing commercial invoices in accordance with existing contractual obligations and operational arrangements.
The FBR has also stipulated that digital invoices must be issued on or before the date of submission of the monthly sales tax return.
Facility to amend and retrieve invoices
To facilitate compliance, E&P companies will be allowed to retrieve parked invoices from the Digital Invoicing dashboard and transfer them to Annexure C before submitting their monthly sales tax returns.
Companies will also be permitted to delete or amend invoices reported in Annexure C before filing their returns.
The measures are intended to address operational difficulties associated with electronic invoicing in the petroleum exploration and production sector while ensuring compliance with the FBR’s digital reporting requirements.
The new procedure provides greater flexibility to joint venture partners, particularly non-operating companies, in fulfilling their sales tax invoicing obligations through the FBR’s integrated system.