The Federal Board of Revenue (FBR) can now issue an initial penalty of Rs 500,000 to sales tax-registered persons who have not integrated their invoicing systems with the FBR, effective September 1, 2025. The move targets importers, public companies, and businesses with annual turnover exceeding Rs 1 billion in the last twelve sales tax returns, according to a news report.
Under Section 25A of the Sales Tax Act, 1990, FBR field formations are legally authorised to issue penalties to those who fail to start issuing electronic invoices carrying the FBR invoice number, QR code, and logo. Subsequent violations could trigger higher fines of Rs 1 million, Rs 2 million, and Rs 3 million.
Experts noted that any sales tax invoices issued outside the digital invoicing system after September 1 will be considered illegal. Purchasers of such invoices will not be eligible for input adjustments, potentially affecting compliance and tax credits.
Public companies and large enterprises are generally well-prepared to comply with SRO 1413(I)/2025, making the enforcement of penalties on them more justifiable. However, small, medium, and seasonal importers may face challenges in immediate system integration.
Tax specialists have urged FBR to consider extending the integration deadline, particularly in light of severe flooding affecting businesses nationwide. At the same time, they recommended that registered taxpayers complete integration and begin issuing electronic invoices promptly to help curb unregistered or “flying” invoices.
