Karachi, July 21, 2025 – Big changes are now live for Pakistan’s e-commerce sector under the Finance Act, 2025. According to renowned tax expert and High Court Advocate Muhammad Zeeshan Merchant, only tax registered sellers are eligible to make online supplies under the new legal framework.
Speaking on the impact of these amendments, Merchant, a former president of the Karachi Tax Bar Association, highlighted a critical shift: “From now on, only registered individuals holding both a National Tax Number (NTN) and a Sales Tax Registration Number (STRN) can sell goods online. This rule applies equally to both resident and non-resident sellers.”
So, what exactly counts as an online supply? If you’re buying or selling goods through websites, mobile apps, or digital marketplaces, you’re part of e-commerce. Payment can be through credit cards, bank transfers, or even cash on delivery (CoD). But whether payment is made online or not, tax rules now apply the same way.
Under the revised Sales Tax Act, 1990, a 2% sales tax is now applicable on online transactions. Here’s the kicker — this tax is automatically collected by intermediaries such as banks, couriers, payment gateways, and digital wallets. Yes, even your CoD orders are now subject to deduction.
“These 2% deductions will be considered final for certain sellers, such as cottage industries and non-Tier-1 retailers. However, they won’t be able to claim any input tax credits for these transactions,” Merchant added.
But the most crucial part? Registration is now non-negotiable. Section 14 of the Sales Tax Act has been expanded through sub-sections 1A and 1B, making it mandatory for any person selling digitally-ordered goods — including non-residents — to be registered, unless exempted.
Also, online marketplaces and couriers are now legally bound to serve only those sellers who are tax registered. This includes verifying that the seller has both an NTN and an STRN before handling their online transactions.
A further new clause (2A) now empowers tax authorities to forcibly register individuals who haven’t complied despite being liable — after giving them a chance to be heard.
In short: if you’re not registered, you’re out of the online game. The message is clear — get registered, stay compliant, and play fair in Pakistan’s rapidly evolving e-commerce landscape.