FBR outlines transactions treated as supplies, including sales, private use, auctions, transfers and goods held when registration ends.

ISLAMABAD: The Federal Board of Revenue (FBR) has explained the meaning of ‘supply’ under the Sales Tax Act, 1990 for tax year 2027, outlining the transactions covered by the term for sales tax purposes.

According to the Sales Tax Act, 1990, updated up to June 30, 2026, “supply” means a sale or other transfer of the right to dispose of goods as owner. This also includes a sale or transfer made under a hire purchase agreement.

The law further specifies several transactions that fall within the definition of supply.

Transactions treated as supply

The definition includes the private, business or non-business use of goods produced or manufactured during a taxable activity where the goods are used for purposes other than making a taxable supply.

The term also covers the auction or disposal of goods to satisfy a debt owed by a person.

Another transaction treated as a supply is the possession of taxable goods held immediately before a person ceases to be a registered person under the sales tax law.

In cases where goods are manufactured for another person, the transfer or delivery of those goods to their owner, or to a person nominated by the owner, is also included in the definition of supply.

FBR empowered to specify other transactions

The law further empowers the FBR, with the approval of the Federal Minister-in-charge, to specify through a notification published in the official Gazette other transactions that will or will not constitute a supply.

The definition is important for taxpayers because determining whether a transaction constitutes a supply helps establish when sales tax obligations may arise under the Sales Tax Act, 1990.

The provision is contained in the FBR’s updated Sales Tax Act, which incorporates amendments and updates made up to June 30, 2026, and provides the applicable legal framework for tax year 2027.