Sales tax
Sales Tax Registration in Pakistan: Who Actually Has to Register
Registration is triggered by what you do, not by how much you earn. Section 14 of the Sales Tax Act 1990 lists categories: manufacturer, retailer, importer, exporter claiming refunds, wholesaler or distributor. There is no turnover threshold in it. Goods are federal and services are provincial, so a service business in Khyber Pakhtunkhwa registers with KPRA rather than FBR. After registering you have thirty days to complete biometric verification at NADRA.
We do this for clients:E-commerce ManagementSales 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.
Who section 14 actually requires to register
Every person making taxable supplies in Pakistan, including zero-rated supplies, in the course of a taxable activity, who falls in one of these categories.
- A manufacturer who is not running a cottage industry
- A retailer liable to pay sales tax, excluding one who pays through the electricity bill under section 3(9)
- An importer
- An exporter who wants a refund against zero-rated supplies
- A wholesaler, dealer or distributor
- A person required under any other federal or provincial law to be registered for a duty or tax collected as if it were sales tax
The thresholds that do exist
Two real thresholds, doing different jobs. Neither is a general registration threshold, and neither is 12.5 million.
| Concept | Test | Effect |
|---|---|---|
| Cottage industry, s.2(5AB) | No industrial gas or electricity connection, in a residential area, at most 10 workers, and annual turnover not over Rs 8 million | Excluded from registration as a manufacturer |
| Tier-1 retailer, s.2(43A) | Chain store, air-conditioned mall unit, 12-month electricity bill over Rs 1.2 million, bulk importer-retailer, or shop of 1,000 square feet or more | Brings integration and reporting obligations |
Goods are federal, services are provincial
This is the question to settle before any other, because getting it wrong means registering with the wrong authority entirely. Sales tax on goods is federal and administered by FBR. Sales tax on services is provincial: Punjab through the PRA, Sindh through the SRB, Khyber Pakhtunkhwa through the KPRA, and Balochistan through the BRA.
A software house, a marketing agency or a consultancy is supplying services, so its sales tax obligation is provincial. Section 14(1)(f) is the bridge: a person required to register under a provincial law also falls into the federal category, which is why businesses doing both need to think about both.
Registering with KPRA
The timings in the KP Act are unusually specific, and both run in your favour if you plan.
- 1
Apply before you are liable, not after
Section 29(6) requires the application not later than fifteen days before you become liable to be registered. That is a forward-looking deadline, which is unusual and easy to miss.
- 2
The Authority has fifteen days
Section 29(7) requires the Authority to register and notify within fifteen days of the application.
- 3
Know whether you are a withholding agent
Being one is itself a registration trigger under section 29(1)(c), regardless of whether you supply any taxable service at all.
- 4
File monthly
Payment is due on the fifteenth day of the month following the tax period. A revised return needs the Collector's prior permission and must be within six months.
Registering with FBR for goods
Through IRIS, and the step after registration is the one people miss.
- 1
File Form 14(1) in IRIS
Log in, select the sales tax registration form, give the tax period and say whether you are a manufacturer or not.
- 2
Upload what the form asks for
A bank account certificate in the name of the business, business details, GPS-tagged photographs of the premises, utility supplier registration numbers and meter photographs. A manufacturer additionally uploads GPS-tagged photographs of machinery and industrial meters.
- 3
Complete biometric verification within thirty days
Visit a NADRA e-Sahulat centre. This is the step that catches people out.
Selling online now triggers registration
Sections 14(1A) and 14(1B), inserted by the Finance Act 2025, changed the position for anyone selling through a marketplace or their own website. Any person, including a non-resident, selling digitally ordered goods from within Pakistan through an online marketplace, website or software application must apply for registration.
The enforcement sits with the platforms rather than with you. Under 14(1B) an online marketplace or courier may not allow anyone to use its services for e-commerce unless that person holds an NTN and, where 14(1A) applies, sales tax registration. So the practical consequence of not registering is that you cannot sell, rather than that you receive a notice.
Who collects depends on how the customer pays. For an online payment the acquiring bank acts as payment intermediary and withholds. For cash on delivery the courier carries the obligation.
Questions
The questionspeople ask
What is the turnover threshold for sales tax registration in Pakistan?
There is not one. Section 14 of the Sales Tax Act 1990 lists categories of person who must register and contains no turnover threshold. The Rs 12.5 million figure that circulates is not in section 14, nor in the cottage industry definition, nor in the Tier-1 retailer definition.
Do I register for sales tax with FBR or with my province?
Goods are federal and go to FBR. Services are provincial: Punjab to the PRA, Sindh to the SRB, Khyber Pakhtunkhwa to the KPRA, Balochistan to the BRA. A software house or agency supplies services, so its obligation is provincial.
Does a small service business in KPK need to register with KPRA?
Possibly, and turnover is not the test. Section 29 of the Khyber Pakhtunkhwa Sales Tax on Services Act 2022 requires registration by a person who provides a taxable service from a place of business in the Province, or who is a withholding agent. There is no turnover threshold in it.
What is the biometric verification requirement for sales tax?
After registering with FBR you must visit a NADRA e-Sahulat centre within thirty days for biometric verification. Failing to attend, or failing the verification, results in removal from the Sales Tax Active Taxpayer List.
Do I need sales tax registration to sell online in Pakistan?
If you sell digitally ordered goods from within Pakistan through a marketplace, website or app, section 14(1A) requires you to apply. Marketplaces and couriers are separately barred under 14(1B) from letting you use their services without an NTN and, where applicable, sales tax registration.
What documents are needed for sales tax registration?
A bank account certificate in the name of the business, business details including activity and capacity, GPS-tagged photographs of the business premises, utility supplier registration numbers and meter photographs. A manufacturer additionally provides GPS-tagged photographs of machinery and industrial meters.
Can FBR freeze my bank account for not registering?
Section 14AC provides for it, but it comes into force only on a date notified in the official Gazette and we have not traced that notification. Even once in force it requires three consecutive opportunities of being heard and staged suspensions before a permanent bar.
When is a sales tax return due?
Federally, the due date is the fifteenth day of the month following the tax period, and the Board may notify different dates for different annexures. Under the KP Act the position is the same fifteenth-day rule, with a revised return needing the Collector's prior permission within six months.
Also here
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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.