Filing Sales Tax Return in Pakistan

There are different types of taxes in Pakistan, but they can be broadly categorized into direct and indirect taxes. Direct taxes are those which are charged directly from the taxpayer, while indirect taxes are those where the burden is eventually borne by the end-consumer. Sale tax is an indirect tax which in Pakistan is levied at multiple points. This means that every time goods or services are sold commercially, sales tax must be charged. The 18th Amendment to the Constitution of Pakistan promises financial autonomy to the provinces. In the same vein, sales tax on services has been given to the provinces, and is not the subject matter of this article. This article focuses on the procedure for filing a sales tax return with regard to the sale of goods only. Sales tax on goods is the domain of the federal government and is regulated by the Federal Board of Revenue in terms of the Sales Tax Act 1990. The Act 1990 applies to businesses engaged in the import, export, sale, and purchase of goods. If you are a business owner in Pakistan, you are required to file a Sales Tax Return if your business is engaged in commercial sale and purchase, import, or export of goods.

WHO IS REQUIRED TO BE REGISTERED UNDER SALES TAX ACT 1990?

All importers, wholesalers, and distributors must be registered with the government, except for cottage industry manufacturers (defined as having annual turnover below Rs.5 million and annual utility bill below Rs. 600,000/-). Retailers making over 5 million rupees in any 12-month period must also be registered. Service providers such as hotels, clubs, caterers, customs agents, ship chandlers, stevedores, and courier services must also be registered by law. Persons making zero-rated supplies, including commercial exporters who intend to obtain a sales tax refund on their zero-rated supplies, can still be compulsorily registered by the FBR after conducting an inquiry.

STEPS TO FILE SALES TAX RETURN:

1. Register in Sales Tax with FBR on TRF 1 form. Forms can be obtained from your local district FBR office.
2. Once you have been registered, you will be issued a unique login and password for your business. Login to fbr.gov.pk and enter your credentials. A window will appear displaying your company’s profile and previously submitted return files.
3. Click on declaration if you wish to file a sales tax return for a certain month. Select the tax year and tax month for which you wish to file the return.

Lahore Office

Main Boulevard Gulberg, Main Market, Lahore, Punjab 54000
Mr. Ahmed Burhan

Faisalabad Office

Burhan Center, 97-99, Gulistan Market Railway Road, Faislabad, Pakistan
Mr. Ahmed Burhan

UK Office

Associate Office (London)
Mr. Ahmed Burhan