FBR mandates balance sheets for new sales tax registrations

The Federal Board of Revenue (FBR) has introduced updated Sales Tax Rules effective January 2025, requiring new non-manufacturer applicants for sales tax registration to submit balance sheets reflecting their business capital. 

The rules will apply to individuals, associations of persons, and single-shareholder companies. According to the updated rules, applicants with National Tax Numbers (NTNs) or income tax registrations must use their login credentials to upload specified documents. 

These include a balance sheet indicating business capital for non-manufacturers and additional documents such as a bank account certificate in the business’s name, gas and electricity consumer numbers, and branch details for businesses operating multiple locations. Manufacturers must also provide GPS-tagged photographs of machinery and proof of industrial electricity or gas meters.

The updated rules state that individuals, associations of persons, or single-shareholder companies already registered but failing to meet electronic return filing requirements will need prior authorization from the Commissioner via the IRIS system. 

Once the required documents are submitted, the system will register the applicant for sales tax. However, final registration is subject to the satisfaction and approval of the Local Registration Office (LRO) through an order on IRIS.

After registration, the authorized person must visit NADRA’s e-Sahulat Centre for biometric verification within a month. Failure to do so will result in removal from the Active Taxpayer List. 

Additionally, all individuals, association members, and directors of single-shareholder companies are required to undergo biometric re-verification annually in July. Failure to comply will restrict electronic return filing, requiring Commissioner authorization via IRIS.