The Federal Board of Revenue (FBR) has clear powers under Rule 71 of the Sales Tax Rules, 2006 (updated for 2026) to recover sales tax from defaulters. Understanding how these recovery actions work can help businesses stay compliant and avoid legal complications.
📌 Key Provisions of Rule 71: Sales Tax Recovery
Rule 71 empowers FBR to take multiple actions against defaulters if tax dues remain unpaid. Here’s how the process works step by step:
1. Automatic Deduction from Government Receivables
o After 30 days from the adjudication of dues, the referring authority can deduct the owed amount from any money owed to the defaulter under the control of government officers.
2. If Dues Are Not Fully Recovered
FBR may take additional recovery steps:
o Serve Notice to Tax Officers: Notices in Form STR-16 can direct Sales Tax, Customs, Federal Excise, and Income Tax officers to deduct the dues.
o Third-Party Payment Notices: Anyone holding money on behalf of the defaulter may be instructed to pay FBR directly.
o Stop Customs Clearance: Customs officers may halt the clearance of goods imported by the defaulter.
o Bank Account Attachments: FBR may attach the defaulter’s bank accounts to recover dues.
3. Installment Recovery Option
o Either before or after initiating recovery, the Collector may allow the defaulter to pay in installments, if requested.
4. Recovery of Short-Paid Tax
o If a registered person pays less than the due tax, FBR can directly attach bank accounts or stop clearances after issuing a three-day notice.
⚡ Know Your Risk
Calculate Your Risk of Recovery Action
• Enter your pending sales tax amount and payment delay to estimate potential FBR recovery actions.
FAQ Section
• Q1: What is Form STR-16?
A: It is the official FBR form used to instruct tax officers to recover dues.
• Q2: Can FBR attach accounts of a company director?
A: Yes, if the director has personal liability for the tax dues.
• Q3: How long before FBR can stop my imports?
A: Immediately after issuing notice for non-payment of tax dues.
✅ Tips to Avoid FBR Recovery Action
1. Timely Filing and Payment – Avoid delays in filing returns and paying taxes.
2. Maintain Accurate Records – Keep all invoices and bank statements ready for verification.
3. Consult Tax Experts – Professional advice can prevent unintended short payments.
4. Respond Promptly to Notices – Ignoring STR-16 or other notices can trigger strict recovery measures.
Disclaimer: The information provided in this article is for general informational purposes only and is based on Rule 71 of the Sales Tax Rules, 2006 (updated for 2026). It does not constitute legal or financial advice. Businesses and individuals should consult a qualified tax professional or the Federal Board of Revenue (FBR) for guidance specific to their circumstances. The author and publisher are not responsible for any actions taken based on the content of this article.