Legal Entities To Be Registered For Sales Tax
Sales tax is a form of indirect tax imposed on the sale of goods and services. In Pakistan, sales tax is governed by the Federal Board of Revenue (FBR) and is applicable to both goods and services, with certain exemptions and limitations. In the following list of persons to be registered for sales tax in FBR to run their business in Pakistan.
- All importers
- All wholesalers (including dealers) and distributors
- Manufacturers not falling in cottage industry. {Cottage industry means a manufacturer whose annual turnover from taxable supplies made in any tax period during the last twelve months ending any tax period does not exceed [ten] million rupees or whose annual utility (electricity, gas and telephone) bills during the last twelve months ending any tax period do not exceed [eight] hundred thousand rupees;}
- Retailers (Tier-1 retailers means:
- A retailer operating as a unit of a national or international chain of stores;
- A retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks;
- A retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rupees six hundred thousand; and
- A wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers;)
- A person required under any Provincial or Federal Law to be registered for purpose of any duty or tax collected or paid as if it were a levy of sales tax, e.g. service providers like hotels, clubs, caterers, customs agents, ship chandlers, stevedores, courier services etc.
- Persons making zero-rated supplies, including commercial exporter who intends to obtain sales tax refund against his zero rated supplies.
- A person who is required to be registered by virtue of aforesaid criteria, but still avoids registration, can be compulsorily registered by the department, after proper enquiry, under sub- rule 1 of Rule 6 of Sales Tax Rules, 2006.
Above Information is collected from FBR.
Procedure of Registration of Sale Tax
The following are the basic steps to get registration of sale tax.
Step 1: Iris Login Credential on FBR and Select Form 14(1)
Before registration of sale tax, it is important that the person already registered his business in the form of Sole Proprietorship, Single Member Company, Association of Partnership, Private Limited Company or Public Limited Company with Federal Board of Revenue and having NTN with principle activity, then the person or represented of a legal entity logged in and shall select Form 14(1) (Form of Registration filed voluntarily through Simplified) (Sales Tax) from the registration drop down menu.
Tax Period
Select Tax Period in the form 14(1) form of registration filed voluntarily through simplified (Sales Tax).
Sale Tax Information
- Individual, the type of registration, whether it is a Manufacturer or Non-Manufacturer
- Association of Person or Company, CNIC of the Member/Director/Principal Officer along with the type of registration, whether it is a Manufacturer or Non-Manufacturer
Bank Account Certificate
Bank Account details that include the Bank Account Certificate issued by the bank in the name of the business
Business Details
Business details including Business Name, Acquisition Date, Capacity and Business Activity along with particulars of all branches in case of multiple branches at various locations
- GPS-tagged photographs of the business premises
- Registration / consumer number with the gas and electricity supplier along with pictures of utilities meter
- In case of Manufacturer, also the GPS-tagged photographs of machinery and industrial electricity or gas meter installed
Step 2: Bio-metric Verification
After registration, in recent amendment, the person registered through Iris Portal is required to visit e-Sahulat Centre of NADRA within 30 days for bio-metric verification. In case of failure to visit or failure of verification, the registered person’s name shall be taken off the Sales Tax Active Taxpayer List.
Step 3: Post Verification – Manufacturer
The Board may require post-verification from manufacturer via field offices or a third party authorized by the Board. The registered person will be removed from the Sales Tax Active Taxpayer List if, during the registration process, the field office determines that any of the documents provided are not genuine, fake, or incorrect. In this case, it will use the system to request that the missing document be provided within fifteen days.