Sales Tax Registration Guide: FBR, PRA, and SRB Setup

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Introduction to Sales Tax in Pakistan

Sales tax in Pakistan is categorized into two main domains: Sales Tax on Goods and Sales Tax on Services. Sales tax on goods is a federal subject managed by the Federal Board of Revenue (FBR) under the Sales Tax Act 1990. On the other hand, service sales tax is a provincial subject governed by respective provincial revenue authorities. Registering for sales tax and obtaining a Sales Tax Registration Number (STRN) is mandatory for business entities once their revenue crosses the exemption threshold.

Federal Sales Tax Registration (FBR STRN)

If your business imports, exports, manufactures, distributes, or wholesales physical goods, you must register with the FBR. The standard sales tax rate for most registered goods is 18%. To obtain FBR sales tax registration:

1. Log in to the FBR Iris portal and submit a Form 14(1) (Application for registration).
2. Provide proof of business location (rent agreement or property registry), utility bills, and bank maintenance certificate.
3. Complete the biometric verification at NADRA e-Sahulat or FBR Sahulat Center within 30 days of filing the application.

Provincial Sales Tax on Services (PRA & SRB)

If your business provides services (e.g., IT consultancy, software houses, marketing, logistics, construction, or hospitality), you must register with the provincial tax authority based on where your services are rendered:

• PRA (Punjab Revenue Authority): Applies to services rendered in Punjab. The standard tax rate is 16% (some services like IT are subject to reduced rates).
• SRB (Sindh Revenue Authority): Applies to services rendered in Sindh. The standard sales tax rate is 13%.
• KPRA & BRA: Respectively govern Khyber Pakhtunkhwa (15%) and Balochistan (15%).

Mandatory Monthly Sales Tax Returns

Once registered, businesses are legally required to file monthly Sales Tax Returns (usually by the 15th or 18th of the next month), regardless of whether there was any business activity during the month. Failure to file monthly returns results in automatic suspension of STRN, blacklisting on the active taxpayer list, and penalties starting at Rs. 10,000 per missed filing.