Karachi, September 7, 2025 – The Sales Tax Act, 1990, updated through the Finance Act, 2025, has once again highlighted the categories of persons for whom sales tax registration is compulsory during the tax year 2025-26.
The Federal Board of Revenue (FBR) has clarified these requirements under Section 14 of the Act, ensuring that businesses and individuals understand their obligations.
Who Must Register?
According to the updated provisions:
• Manufacturers (except those classified as cottage industry operators).
• Retailers liable to pay sales tax, other than those paying through electricity bills under Section 3(9).
• Importers and exporters (especially exporters claiming refunds against zero-rated supplies).
• Wholesalers, dealers, or distributors.
• Any person required by other federal or provincial laws to be registered for duty or tax treated as sales tax.
In addition, non-resident persons, online sellers, and e-commerce businesses are included in the net. Every online marketplace, courier, or platform supplying digitally ordered goods within Pakistan must ensure sellers hold both an NTN and valid sales tax registration.
What Happens If You Don’t Register?
The law provides that if a person fails to apply for mandatory registration, the Commissioner Inland Revenue (or another authorized officer) may initiate an inquiry. If liability is established, the person can be compulsorily registered after being given an opportunity of hearing.
Do You Need to Register?
Ask yourself the following questions:
1. Am I a manufacturer, importer, or wholesaler?
2. Do I sell online or through a digital marketplace?
3. Am I claiming refunds on zero-rated exports?
4. Do I run a retail business beyond electricity-bill-based tax deduction?
👉 If you answered yes to any of these, sales tax registration is likely mandatory for you.
Why It Matters
Compulsory registration is not only about compliance; it also allows businesses to:
• Claim input tax credits.
• Access refunds on exports.
• Avoid penalties and legal complications.
• Build credibility with suppliers and customers.
Final Word
The FBR’s updated rules serve as a reminder that the tax landscape is evolving with the growth of e-commerce and digital sales. Business owners, whether traditional or online, must stay informed to avoid unnecessary complications.
📌 Disclaimer: This article is for informational purposes only. It does not constitute legal or tax advice. Businesses are advised to consult a qualified tax professional for personalized guidance.