Registered persons must now issue invoices for taxable and exempt supplies, including advance receipts, under the amended Sales Tax Act.
ISLAMABAD: The Federal Board of Revenue (FBR) has made it mandatory for registered sales tax persons to issue invoices for both taxable and exempt supplies, as part of its ongoing drive to digitalise Pakistan’s sales tax system.
The FBR issued Circular No. 1 of 2026, explaining major amendments to the Sales Tax Act, 1990 introduced through the Finance Act, 2026.
According to the circular, under the existing sub-section (1) of section 23 of the Sales Tax Act, 1990, a registered person was previously required to issue a sales tax invoice only for taxable supplies.
The provision has now been amended to require registered persons to issue invoices for both taxable and exempt supplies. The requirement also applies to invoices issued against advance receipts.
FBR invoice number required
The invoices must carry a verifiable and unique FBR invoice number, enabling the tax authority to digitally track and verify transactions.
The introduction of a unique invoice number is expected to give the FBR greater visibility over commercial transactions and strengthen its ability to verify information submitted by registered persons.
The measure forms part of the Board’s wider digitalisation of sales tax administration and its efforts to improve transparency in the declaration of business activities.
Exempt supplies brought into digital trail
The amendment will give the tax authority greater visibility into transactions involving both taxable and exempt supplies.
Previously, exempt supplies did not fall within the same invoicing requirement under the relevant provision. Bringing them within the mandatory invoicing framework will create a digital trail for a broader range of commercial transactions.
The FBR is expected to use the additional transaction data to strengthen documentation and monitoring of economic activity while improving compliance with sales tax requirements.
FBR expands sales tax monitoring
The new requirement is also intended to reduce gaps in sales tax reporting by ensuring that transactions involving exempt supplies are documented through invoices that can be digitally verified.
The measure expands the scope of the existing invoicing framework while supporting the FBR’s wider shift towards digital monitoring and data-based sales tax administration.
Registered sales tax persons will therefore need to ensure that invoices issued for taxable and exempt supplies, including relevant advance receipts, meet the amended requirements and contain the required FBR invoice identification.