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Sales tax

Filing a Monthly Sales Tax Return

Pay by the 15th of the month following the tax period and file by the 18th. Those are separate obligations under separate provisions and each carries its own penalty. Input tax on a purchase depends on your supplier declaring the corresponding supply, and where they do not, your return sits provisionally until the system recomputes it.

We do this for clients:Sales Tax Registration and Filing in Pakistan

Where these figures come from

Statutory basis
Income Tax Ordinance, 2001, as amended by the Finance Act 2026, for tax year 2027 (1 July 2026 to 30 June 2027).
Last checked against the statute
by BarrioVibe, which files income tax returns through FBR IRIS.

These figures are an estimate computed from the rates above, not tax advice for your situation. Your return depends on facts a form cannot see, so treat the number as a starting point and speak to us before you file on it.

Your input tax depends on someone else filing

This is the structural feature that makes sales tax different from income tax, and the source of most of the pain. The input tax you claim on a purchase is matched against what your supplier declares in their own return. If they have not declared the supply, the deduction is not simply accepted on your invoice.

Three separate provisions sit behind that, which is worth knowing because they are usually described as one rule. Section 8(1)(ca) disallows input where the tax has not been deposited by the supplier. Section 8(1)(caa) covers a CREST discrepancy or input not verifiable in the supply chain. Section 8(1)(l) covers a supplier who has not declared or paid. Section 8A adds joint and several liability, and it puts the burden of proof expressly on the department rather than on you.

Filing when you had no activity

A registered person with nothing to report still files. What is worth knowing is that the Sales Tax Act contains no express nil-return provision: the words do not appear. The duty comes from section 26(1), which requires every registered person to furnish a return, reinforced by the deletion of the words "making taxable supplies" from that section in 1999.

That is a striking contrast with income tax, where section 165 of the Income Tax Ordinance expressly requires a withholding statement even where no tax was collected. If you genuinely have no continuing activity, the exit is de-registration under section 21 with a final return under section 28, and note that after six months you need the Commissioner's approval to file at all.

Questions

The questionspeople ask

  • When is the sales tax return due in Pakistan?

    There are two dates. The tax is deposited by the 15th of the month following the tax period, and the return is submitted electronically by the 18th, under rule 18(9) of the Sales Tax Rules. They are separate obligations with separate penalties under section 33.

  • What is the penalty for filing a sales tax return late?

    Fifty thousand rupees under section 33, entry 1, or two thousand rupees for each day of default where the return is filed within ten days of the due date. The Finance Act 2026 raised these from ten thousand and two hundred rupees.

  • What happens if my supplier does not file their sales tax return?

    Your return sits provisionally in IRIS until they file, up to the last day of the month in which the due date falls. If they still have not filed, the system deletes those invoices and the input tax, recomputes your liability, and your return becomes valid on paying the recomputed amount. Rule 18A carves out six categories.

  • Can I claim input tax if the supplier has not paid it?

    Not generally. Sections 8(1)(ca), 8(1)(caa) and 8(1)(l) each disallow input tax where the supplier has not deposited it, where there is a CREST discrepancy or it is not verifiable in the supply chain, or where the supplier has not declared or paid. Section 8A adds joint and several liability with the burden of proof on the department.

  • Is there a limit on input tax adjustment?

    Yes. Section 8B caps it at ninety per cent of output tax, with carve-outs for fixed assets and capital goods and an annual true-up against audited accounts. The Finance Act 2026 lets the Board vary the limit per person based on compliance with digital invoicing and similar systems.

  • Do I have to file if I had no sales?

    Yes. Section 26(1) requires every registered person to furnish a return, and the Act carries no express nil-return provision at all. If you have no continuing activity the route is de-registration under section 21 with a final return under section 28.

  • Does an incomplete annexure just delay my return?

    No, it invalidates it. Rule 18(1) provides that failing to fill any applicable column of the return or of any annexure makes the return invalid, which means it has not been filed and the late-filing penalty is running.

  • Do I have to pay suppliers by bank transfer?

    For input tax purposes, yes. Section 73 requires payment through the banking channel from your business account to the supplier's, where payments to that supplier aggregate over fifty thousand rupees in the tax period, with a one hundred and eighty day limit for credit transactions.

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Rather have someone handle it?

We file returns through IRIS every day. If the answer above raises a question about your own case, that is the conversation to have before the deadline rather than after it.

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