Sales Tax Registration (GST)

In Pakistan, Sales Tax Registration is a process required for businesses that engage in the sale of taxable goods or services, as per the Sales Tax Act, 1990. It is mandatory for businesses that meet certain criteria to register for Sales Tax (ST) with the Federal Board of Revenue (FBR) to comply with tax laws and collect, report, and remit sales tax to the government.

Taxable Supplies:

Taxable supplies refer to the sale of goods including import of goods that are subject to sales tax. The categorization of taxable goods is primarily determined by whether they are explicitly listed as taxable, zero rated or exempt under the Sales Tax Act, 1990 and the Sales Tax Rules. Some categories of taxable supplies include:

  1. a) General Taxable Goods:

Most goods are subject to sales tax specified in Third Schedule, with a standard rate of 18%, unless specified otherwise. List of taxable goods include:

  • Consumer goods (fruit Juices, ice cream, beverages, syrups, cigarettes, detergents, shampoo, toothpaste, perfumes, cosmetics etc)
  • Household Electrical goods (air conditioners, refrigerators, deep freezers, televisions, recorders and players, electric bulbs, tube-lights, electric fans, electric irons, washing machines and telephone sets)
  • Household Gas appliances (cooking range, ovens, geysers and gas heaters)
  • Automobiles (cars, motorcycles, trucks)
  • Clothing and footwear
  • Building materials (cement, steel, paints etc.)
  • Furniture (Foam or spring mattresses etc)
  • Chemical products
  • Pharmaceuticals (if not exempt or subject to a reduced rate)
  1. b) Zero-Rated Goods:

Some goods are zero-rated for sales tax, meaning the tax rate is effectively 0% specified in Fifth Schedule but businesses can still claim input tax credits on their purchases. List of zero-rated goods include:

Goods exported outside Pakistan are generally zero-rated.

  • Supplies of raw materials (components and goods for further) manufacture of goods in the Export Processing Zones.
  • Supplies of raw materials, components and goods for further manufacture of goods in the Gawadar Free Zone
  • Supplies of locally manufactured plant and machinery of the following specifications, to manufacturers in the Gawadar Free Zone, subject to the conditions.
  1. c) Exempted Goods:

Some goods are exempt from sales tax under the law specified in Sixth Schedule. These goods are basic necessities or items essential for public. List of exempted goods include:

  • Basic food items (pulses, wheat, rice, vegetables, fruits, milk, etc.)
  • Agricultural products (such as unprocessed raw crops)
  • Certain medicines (as listed in the Sales Tax laws, generally those prescribed for life-threatening conditions)
  • Livestock (such as cows, buffaloes, and sheep, for breeding purposes)
  • Certain agricultural machinery (e.g., tractors for farming)
  1. d) Reduced Rate Goods:

Some goods are subject to a reduced sales tax rate under specific provisions. Examples of reduced-rate goods include:

  • Agricultural products (e.g., certain fresh vegetables and fruits may have a lower rate or be exempt)
  • Certain fertilizers and pesticides
  • Books and educational materials (often subject to a reduced rate or exempt)

Required Documents for Sales Tax Registration:

Registration of Sole Proprietorship:

Scanned copies of:

  • Business NTN
  • Owner’s CNIC (Both sides)
  • Business Bank Account Maintenance Certificate
  • Rent Agreement/ownership documents
  • Utility Bill
  • Letterhead

Registration of Partnership Firm:

ย Scanned copies of:ย ย ย ย 

  • NTN
  • Partners’ CNICs (Both sides)
  • Partnership Deed
  • Business Bank Account Maintenance Certificate
  • Rent Agreement/ownership documents
  • Utility Bill
  • Letterhead

Registration of Company:

Scanned copies of:

  • Company NTN
  • CNIC of all Directors (Both sides)
  • Passports of Directors (for foreign nationals only)
  • Memorandum and Articles of Association (for SECP registered companies only)
  • Form 29 (for SECP registered companies only)
  • Incorporation certificate (for SECP registered companies only)
  • Company Bank Account Maintenance Certificate (In case of new account)
  • Rent Agreement/ownership documents
  • Utility Bill
  • Letterhead

Frequently Asked Questions (FAQs)

Q.ย  What is sales tax?

A.ย  Sales tax is a consumption tax levied on the sale of goods and services in Pakistan.

Q.ย  Who is required to register for sales tax?

A.ย  Every person who is engaged in the business of making taxable supplies is required to register for sales tax.

Q.ย  What is the sales tax rate in Pakistan?

A.ย  The standard sales tax rate in Pakistan is 18%, but it can vary depending on the type of goods or services.

Q.ย  How do I register for sales tax?

A.ย  You can register for sales tax online through the Federal Board of Revenue (FBR) website or by visiting the nearest Regional Tax Office (RTO).

Q.ย  What is the deadline for filing sales tax returns?

A.ย  The deadline for filing sales tax returns is the 15th day of the following month.

Q.ย  What is Input Tax?

A.ย  Input tax refers to the sales tax paid by a registered person on the purchase of goods or services used in the course or furtherance of their business.

Q.ย  What is Output Tax?

A.ย  Output tax refers to the sales tax payable by a registered person on the sale of taxable goods or services

Q.ย  What are conditions for Input Tax Adjustment?

A.ย  To be eligible for input tax adjustment, the following conditions must be met:

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