The Federal Board of Revenue (FBR) has clarified the procedure for compulsory or forced sales tax registration under the Sales Tax Rules, 2006, updated for the tax year 2026.
This article explains what forced registration means, how FBR initiates it, and the rights and responsibilities of a taxpayer under this process.
What is Forced Sales Tax Registration?
Forced or compulsory registration is applied when:
• A person required to register under the Sales Tax Act fails to apply voluntarily.
• The Commissioner Inland Revenue or an authorized officer is satisfied, after inquiry, that registration is required.
FBR can then register the person through the computerized system, even without their initial application.
Step 1: Issuance of Notice (Form STR-6)
Under Rule 6 of Sales Tax Rules, 2006:
1. FBR issues a notice in Form STR-6 to the person who has not applied for registration.
2. The notice informs the person about their requirement to register and the timeline to respond.
⚠ This is the first official step before forced registration is applied.
Step 2: Response and Personal Hearing
• If the person responds in writing contesting their liability:
o They may request a personal hearing with the Commissioner
o After the hearing, the Commissioner issues a final order determining whether compulsory registration is necessary
o If registration is required, it is done through the computerized IRIS system
Step 3: Registration Without Response
• If the person does not respond within the notice period:
o FBR will compulsorily register the person automatically
o Notification of registration is sent via courier or official communication
Step 4: Compliance After Forced Registration
A person registered compulsorily must:
• Follow all provisions of the Sales Tax Act and Rules
• File sales tax returns on time
• Maintain proper records and documentation
⚠ Failure to comply may lead to:
• Notices under Section 25 of the Act
• Assessment of sales tax under Section 11
• Legal action for penalties or default surcharge
Step 5: Cancellation of Wrongful Registration
If it is later found that a person:
• Was not required to be registered, and
• Was wrongly registered due to error or misunderstanding,
Then:
• FBR will cancel the registration in the system
• No tax, surcharge, or penalty will be imposed, subject to Section 3B of the Act
✅ This ensures protection against wrongful registration.
FAQs: Forced Sales Tax Registration
Q1: Who can be compulsorily registered?
Any person required under law to be registered who fails to apply voluntarily.
Q2: Can I contest forced registration?
Yes, you can reply to the STR-6 notice and request a personal hearing.
Q3: What happens if I ignore the notice?
FBR will register you compulsorily, and notice will be sent to you.
Q4: Can a wrongfully registered person be exempted?
Yes, FBR will cancel registration without imposing tax, penalties, or surcharges.
Q5: Do I have to comply immediately after forced registration?
Yes, all provisions of the Act and Rules apply from the date of registration.
Tips for Taxpayers
• Always respond to FBR notices on time to protect your rights.
• Keep accurate business records to avoid penalties after forced registration.
• Consult a tax professional if you believe registration is incorrect.
Conclusion:
Forced sales tax registration by FBR is a legal mechanism to ensure compliance among businesses and individuals who fail to register voluntarily. Understanding your rights, responding timely, and maintaining proper records can prevent unnecessary penalties.
Disclaimer: This article is for informational purposes only and does not constitute legal or financial advice. Consult the Federal Board of Revenue (FBR) or a certified tax professional for official guidance.