Karachi, July 23, 2025 – If you’re a business engaged in taxable supplies and still haven’t registered for sales tax, it’s time to take notice! The Finance Act, 2025 has introduced tough new restrictions through three powerful sections—14AC, 14AD, and 14AE—under the Sales Tax Act, 1990. These sweeping changes aim to crack down on unregistered persons and bring them into the formal tax net.
Tax expert and former KTBA President, Muhammad Zeeshan Merchant, explained that the core objective of these new sales tax provisions is to apply strategic pressure on non-compliant businesses until they comply.
🔒 Section 14AC – Restrictions on Bank Operations
This section enables the Commissioner to freeze the bank accounts of individuals engaged in taxable activity but not registered under the Sales Tax Act.
Here’s how it works:
• The person gets three notices/hearings to register voluntarily.
• If they fail to respond, the Commissioner can freeze their bank account for three working days.
• This action can be repeated twice more, with one-week intervals.
• Still not registered? A permanent ban on bank operations can be imposed.
Relief: Once registration is completed, the bank ban is lifted within two working days. Appeals can be filed within 30 days before the Chief Commissioner. The section will be enforced once the FBR issues an official notification.
🏠 Section 14AD – Restrictions on Immovable Property Transfer
This kicks in 15 days after permanent bank account suspension, applying even greater pressure. A 3-member committee (Chief Commissioner, Concerned Commissioner, and a Trade Body member) steps in.
They:
• Issue public notices,
• Hold a personal hearing,
• Recommend either to impose or lift a property transfer ban.
The Commissioner can then formally order the property registration authority to block transactions.
Relief: Registration lifts the ban within 2 working days, with appeal rights remaining intact.
🛑 Section 14AE – Final Restrictions on Unregistered Businesses
This section allows the Chief Commissioner to:
• Seal premises
• Seize movable property
• Appoint a receiver to control business operations
All of this happens after public notice and an open hearing by the 3-member committee. The decision is then published on the FBR’s website and national newspapers.
Relief is swift—once the business registers, all actions are reversed within 2 working days. Appeals can be made to FBR within 30 days.
These bold steps reflect FBR’s intensified drive to ensure sales tax compliance by introducing restrictions that leave little room for evasion. Businesses are now strongly urged to regularize their status before these legal hammers drop.