# Sales Tax in Pakistan 2026: 18% Rate, Who Must Register and How to File

Source: Searchable (https://searchable.pk/guides/taxes/sales-tax-in-pakistan-explained)
Type: Guide
Author: Searchable Editorial
Published: 30 Sept 2026
Updated: 30 Sept 2026
Retrieved: 30 Sept 2026

> The federal rate stays at 18% for 2026-27, but Finance Act 2026 raised the late-return penalty to Rs 50,000. Here is who must register, how to do it on IRIS and the dates that matter.

**Short answer:** the federal sales tax in Pakistan is **18%** of the value of goods sold or imported (Sales Tax Act 1990, section 3, as amended up to 30 June 2026). Finance Act 2026 left that rate unchanged for 2026-27. Sales tax on services is collected by the provinces: **16% in Punjab** and **15% in Sindh and Khyber Pakhtunkhwa**, with telecom services at 19.5% in Punjab and Sindh.

You must register with FBR if you are an importer, a wholesaler, dealer or distributor, a manufacturer (other than a cottage industry), a Tier-1 retailer, an exporter claiming refunds, or someone selling goods online. Registration is done online on FBR's IRIS portal.

To check the tax on any bill or price, use our [sales tax calculator](/tools/tax/sales-tax-calculator).

## Sales tax rates in Pakistan 2026-27

| Tax | Who collects | Rate | Source |
|---|---|---|---|
| Sales tax on goods (standard) | FBR | 18% of value | Sales Tax Act 1990, s. 3(1) |
| Third Schedule goods (printed retail price) | FBR | 18% of retail price | s. 3(2)(a) |
| Further tax on supplies to unregistered or inactive buyers | FBR | 4% extra | s. 3(1A) |
| EV buses (25+ seats) and electric trucks, CBU | FBR | 1% | Eighth Schedule, S. No. 80 (Finance Act 2026) |
| Services in Punjab | PRA | 16% (telecom 19.5%) | PRA FAQs |
| Services in Sindh | SRB | 15% (telecom 19.5%) | Sindh Sales Tax on Services Act 2011, s. 8 |
| Services in Khyber Pakhtunkhwa | KPRA | 15% | KP Sales Tax on Services Act 2022, s. 9 |
| Services in Balochistan | BRA | check with BRA | BRA site could not be reached on 30 Sep 2026 |

Some goods carry a reduced rate (Eighth Schedule) or are exempt (Sixth Schedule). Finance Act 2026 added exemptions for contraceptives, sanitary pads and tampons, and wheat and rice bran, and kept newsprint, books and magazines exempt (brochures, leaflets and directories excluded). Rate changes on specific products can move prices sharply: see how the [hybrid car sales tax change played out for the MG ZS Hybrid](/news/auto/hybrid-sales-tax-cut-to-18percent-yet-mg-zs-hybrid-goes-up-rs-400000-on-1-octobe).

Finance Act 2026 also moved more packaged goods into the Third Schedule, where tax is charged on the printed retail price. The new entries include packaged milk, cooking oil, confectionery, cosmetics, crockery, plastic household items, bags, car accessories, sanitaryware and footwear (unless the maker sells only through POS-integrated outlets).

## Who must register for sales tax

Under section 14 of the Sales Tax Act, these persons must register with FBR:

- Manufacturers, except a cottage industry. A cottage industry has no industrial gas or electricity connection, sits in a residential area, has 10 workers or fewer and annual turnover of Rs 8 million or less. It must meet all four tests.
- Importers.
- Wholesalers, dealers and distributors.
- Retailers liable to pay sales tax, especially Tier-1 retailers.
- Exporters who want sales tax refunds on zero-rated supplies.
- Anyone selling goods online through a marketplace, website or app (added by Finance Act 2025).

A **Tier-1 retailer** includes a national or international chain outlet, a shop in an air-conditioned mall or plaza (kiosks excluded), a shop whose electricity bills over the past 12 months exceed Rs 1.2 million, and, from Finance Act 2026, any retailer or wholesaler-cum-retailer with turnover above Rs 200 million. Tier-1 retailers must integrate their billing with FBR's Point of Sale (POS) system.

Service providers register with their provincial authority (PRA, SRB, KPRA or BRA), not FBR. PRA says there is no turnover threshold for taxable services in Punjab.

## How to register for sales tax on IRIS: 7 steps

You need an active NTN and IRIS login first. If you do not have one, follow our [FBR IRIS login and registration guide](/guides/taxes/fbr-iris-login-registration-and-filing-guide), and [check your NTN online](/guides/taxes/ntn-number-check-online) to confirm your details.

1. **Log in to IRIS** at iris.fbr.gov.pk with your existing IRIS credentials.
2. **Open Registration** and select Form 14(1), "Form of Registration filed voluntarily through Simplified (Sales Tax)".
3. **Choose your type:** manufacturer or non-manufacturer. A company or AOP also enters the CNIC of each director, member or principal officer.
4. **Add a bank account certificate** issued by your bank in the business name.
5. **Enter business details:** name, acquisition date, capacity, business activity and every branch address.
6. **Upload evidence:** GPS-tagged photos of the premises, electricity and gas consumer numbers with meter photos, and for manufacturers GPS-tagged photos of machinery and the industrial meter. Submit, and IRIS issues your registration.
7. **Complete biometric verification** at a NADRA e-Sahulat centre within 30 days. Miss it, or fail it, and your name is taken off the sales tax Active Taxpayer List (ATL).

For manufacturers, FBR may verify later. If a document is found missing or fake, you get 15 days to supply it or you are removed from the ATL. Registration is also possible through the Tax Asaan app.

## How to file the monthly sales tax return

Section 26 requires every registered person to file a return for each tax period. You file one return covering all your activities, due on the date that applies to your main activity.

1. **Log in to IRIS** and open the sales tax return for the month (tax period).
2. **Declare your sales** (output tax) and **purchases** (input tax) in the annexures.
3. **Work out the balance:** output tax minus admissible input tax. If input exceeds output, the excess or refund claim is shown on the return.
4. **Pay the tax due** online or through a bank, using FBR's payment options (including alternate delivery channels such as internet banking).
5. **Submit the return** and keep the acknowledgement.

If FBR's system flags a mismatch after you file, act quickly: see [what the e-scrutiny rule under SRO 1655 means for you](/news/business/fbr-sales-tax-e-scrutiny-sro-1655-gives-you-7-days-to-fix-errors-flagged-on-iris).

## Sales tax deadlines

| What | When |
|---|---|
| Sales annexure (Annex-C) | 10th of the following month |
| Tax payment | 15th of the following month |
| Monthly return | 18th of the following month |
| Annual return (manufacturers) | 30 September after the financial year ends |
| NADRA biometric after registration | Within 30 days |
| Return more than 6 months late | Only with the Commissioner's approval |

These are the dates on FBR's sales tax due dates page. The Act sets the 15th as the default due date and lets FBR notify different dates for different parts of the return. CNG stations file quarterly.

## Penalties for late filing and wrong invoices

Finance Act 2026 raised most sales tax penalties from 1 July 2026:

- **Late return:** Rs 50,000 (was Rs 10,000). If you file within 10 days of the due date, the penalty is Rs 2,000 per day of delay instead.
- **Not issuing an invoice:** Rs 25,000 or 5% of the tax involved, whichever is higher.
- **Unauthorised invoice:** Rs 50,000 or 10% of the tax involved, whichever is higher.
- **Fake or simulated invoice:** a penalty equal to the invoice's face value, and your name goes on a public register.
- **Input tax that does not match your supplier's return:** 20% of the unmatched amount, plus reversal and default surcharge.
- **Not integrating with FBR's systems when required (for example, POS):** up to Rs 1 million, then up to Rs 5 million, and the premises can be sealed.
- **Late payment:** default surcharge at 12% a year or KIBOR plus 3%, whichever is higher.

## E-invoicing and POS

Finance Act 2026 rewrote section 23: every tax invoice, including for exempt supplies, must carry a verifiable, unique FBR invoice number. That condition applies from a date FBR notifies. FBR has launched a digital invoicing system, and Tier-1 retailers must already issue invoices through POS systems integrated with FBR.

Moving stock between your own premises has its own rules: see [STGO 25 on factory-to-warehouse transfers](/news/business/stgo-25-no-sales-tax-or-digital-invoice-on-factory-to-warehouse-transfers).

## Common mistakes

- **Skipping a return because sales were low.** Every registered person must file, and the ATL is a list of active return filers, so missed returns can drop you off it.
- **Skipping biometric verification.** Registration is not complete until NADRA verifies you within 30 days.
- **Forgetting further tax.** Selling to a buyer who is unregistered or not on the ATL adds 4% further tax on top of 18%.
- **Claiming input tax your supplier never declared.** Unmatched input now costs 20% of the amount on top of reversal.
- **Registering services with FBR instead of your province.** Services go to PRA, SRB, KPRA or BRA.
- **Using old penalty figures.** The Rs 10,000 late-return penalty is now Rs 50,000.

## Check your ATL status

FBR updates the sales tax Active Taxpayer List regularly (last updated 28 September 2026). It is the central record of active sales tax return filers. If you drop off it, suppliers must charge you the 4% further tax, so file every return on time.

## Frequently asked questions

**What is the sales tax rate in Pakistan for 2026-27?**

The standard federal sales tax on goods is 18% of value under section 3 of the Sales Tax Act 1990. Finance Act 2026 did not change it. Supplies to unregistered or inactive buyers carry a further 4%.

**What is the sales tax on services in Punjab and Sindh?**

Punjab charges 16% on most services and 19.5% on telecom (PRA). Sindh charges 15% on most services and 19.5% on telecom (SRB). Khyber Pakhtunkhwa charges 15%.

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

From 1 July 2026 the penalty is Rs 50,000. If you file within 10 days of the due date, it is Rs 2,000 per day of delay instead. Late payment also attracts default surcharge of 12% a year or KIBOR plus 3%, whichever is higher.

## Sources

- Sales Tax Act 1990, amended up to 30 June 2026 (Federal Board of Revenue): https://download1.fbr.gov.pk/Docs/20267171373418951SalesTaxAct1990updatedupto30.06.2026.pdf
- Finance Act 2026 (Gazette of Pakistan, 26 June 2026) (Federal Board of Revenue): https://download1.fbr.gov.pk/Docs/20266291261044366FinanceAct2026.pdf
- Register for Sales Tax: Procedure of Registration (Federal Board of Revenue): https://www.fbr.gov.pk/categ/register-sales-tax/51148/50848/101152
- Sales Tax Due Dates (Federal Board of Revenue): https://www.fbr.gov.pk/sales-tax-due-dates/51148/101162
- File Sales Tax Return (Federal Board of Revenue): https://www.fbr.gov.pk/categ/file-sales-tax-return/51148/50849/101158
- Active Taxpayer List (Sales Tax) (Federal Board of Revenue): https://fbr.gov.pk/atl-sales-tax/163223
- POS Legal Provisions (Federal Board of Revenue): https://fbr.gov.pk/pos-legal-provisions/163085/163086
- Punjab Sales Tax on Services FAQs (Punjab Revenue Authority): https://reg.pra.punjab.gov.pk/ptms/Faqs.aspx
- Sindh Sales Tax on Services Act 2011 (updated to Sindh Finance Act 2026) (Sindh Revenue Board): https://www.srb.gos.pk/srb/wp-content/uploads/2026/08/SSTOS_Act2011.pdf
- Khyber Pakhtunkhwa Sales Tax on Services Act 2022 (updated to KP Finance Act 2026) (Khyber Pakhtunkhwa Revenue Authority): https://kpra.gov.pk/wp-content/uploads/2026/09/KPSTSA-2022-Updated-Finance-act-2026.pdf

How to cite: "Sales Tax in Pakistan 2026: 18% Rate, Who Must Register and How to File", Searchable, 30 Sept 2026, https://searchable.pk/guides/taxes/sales-tax-in-pakistan-explained