Karachi, November 19, 2023 – Pakistan has granted taxpayers the flexibility to issue sales tax invoices in either English or Urdu language for documenting transactions, according to the updated Sales Tax Act of 1990 for the tax year 2024.
This significant provision is outlined in Section 23 of the Sales Tax Act, shedding light on the specifics of tax invoice issuance.
Under Section 23(1), a registered person involved in taxable supplies must issue a serially numbered tax invoice at the time of goods supply, incorporating the following particulars in either Urdu or English language:
• Name, address, and registration number of the supplier.
• Name, address, and registration number of the recipient. In the case of supplies by manufacturers or importers to unregistered distributors, the NIC or NTN of such distributors is required.
• Date of issue of the invoice.
• Description, including count, denier, and construction in the case of textile yarn and fabric, along with the quantity of goods.
• Value exclusive of tax.
• Amount of sales tax.
• Value inclusive of tax.
Notably, the condition of NIC or NTN became effective from August 1, 2019, with exemptions for payments through debit or credit cards or digital modes. Furthermore, the FBR reserves the authority to specify modified invoices for different persons or classes of persons through official Gazette notifications. Additionally, no more than one tax invoice is permitted for a taxable supply.
Section 23(2) clarifies that only registered persons or individuals paying retail tax are authorized to issue invoices under this section. Registered persons making taxable supplies may, under Section 23(3), electronically issue invoices to other registered persons, subject to conditions specified by the FBR in official Gazette notifications. The FBR is empowered to prescribe the manner and procedure for regulating the issuance and authentication of tax invoices through notifications in the Official Gazette, as stated in Section 23(4).
