Tax authority gives additional time for businesses to convert into companies under documentation and digitalization drive.
ISLAMABAD: The Federal Board of Revenue (FBR) has extended the deadline for the voluntary corporatization of iron and steel manufacturers until August 10, 2026, providing additional time for eligible businesses to complete their transition into corporate entities.
According to a notification issued by the FBR, the earlier deadline of July 31, 2026, prescribed under Sales Tax General Order (STGO) No. 10 of 2026, has been extended to August 10, 2026.
The Board clarified that all other terms and conditions of STGO No. 10/2026, issued on July 14, 2026, will remain unchanged.
The FBR said the extension follows a positive response to its documentation drive, under which a significant number of individuals and Associations of Persons (AOPs) engaged in iron and steel manufacturing have expressed their intention to convert their businesses into companies limited by shares.
According to the Board, the voluntary corporatization initiative is aimed at promoting documentation and digitalization of Pakistan’s economy, particularly within the iron and steel sector. However, the transition has created temporary operational challenges relating to the continuation of existing sales tax declarations, adjustment of input and output tax, tax refunds, and settlement of tax liabilities.
To address these issues, the FBR has prescribed Standard Operating Procedures (SOPs) under Section 55 of the Sales Tax Act, 1990, and Section 43 of the Federal Excise Act, 2005.
Under the SOPs, the National Tax Number (NTN) allotted to a newly incorporated company will be linked with its previous NTN/Sales Tax Registration Number (STRN) to facilitate the filing of tax returns, adjustment of input tax, and calculation of sales tax liabilities.
The facility will only be available to eligible entities that voluntarily opt for corporatization and submit an application to the FBR.
The Board will decide applications within seven days of receipt. Upon approval, the name of the eligible entity will be added to the prescribed list under the STGO.
The FBR further stated that the facility for linking the old and new NTN/STRN will remain available until December 31, 2026. During this period, businesses will be able to utilize carried-forward input tax and stock balances.
From January 1, 2027, the newly issued NTN/STRN will become fully operative, and no transactions will be permitted under the previous registration number after December 31, 2026.
The Board emphasized that predecessor and successor entities will remain jointly and severally liable for maintaining records, complying with audit requirements, paying outstanding tax liabilities, and responding to any adjudication proceedings relating to periods before or after corporatization.