A.             Background (BG)

1.   This refers to the related Important QCs in trail, blue, italic and double line (a) 3036 of 21.2.25 about Tier-I retailers: Customers benefits on Reporting ‘Unverified Invoices (b) 2944 of 2.11.24 about ST Updated Rules with amended Prize Scheme per SRO 1513, etc (c) 2914 of 1.10.24 about ST Rules for Refund Procedures amended vide SRO 1507 and Updated FST Rules.

2.   We also refer to several Other TLQC including the following (a) 2440 of 1 8.23 about Tier 1 Scope why narrowed & its effects 20 Matters FA Video (b) 2415 of 17.7.23 about Tier-1 Retailer’s Integration with POS now 15,493

B.               Executive Summary

Further to KQU 3234 of 18.2.25, being an important matter, we would inform you about SRO 164 of 17.2.25 - Amendment in Sales Tax Rules, 2006 (Attachment 3045.1) made further amendments in the Federal Sales Tax (FST) Rules, 2006.

The amendments increased further restrictions for procedure for sealing and de-sealing of business premises of Tier-1 Retailers:

1.   The amendments strengthen enforcement of retailer compliance.

2.   Stricter penalties and monitoring for tax evasion and sales suppression.

3.   Businesses must ensure POS systems are fully integrated with FBR and follow updated compliance requirements.

C.             Specific Track Version

For your convenience, the amendments in relevant Rules made are presented below in Italics wherein the additions are in bold and the omissions and substitutions in strikethrough.

150ZEL. Procedure for prize scheme.—(1) The customers of integrated tier-1 retailer,¹who reports unverified invoices issued by tier-l retailer] shall be entitled to prizes in respect of their purchases from the integrated tier-1 retailers.

(2)   The customers shall verify the electronically generated invoice of integrated retailers either through “tax asaan" application or by sending by WhatsApp number to be communicated through an order by the Board].

(3)   The application or WhatsApp number, as the case may be] shall notify the customer regarding the status of invoice either as “Verified" or “unverified".

(4) In case of unverified invoice, the customer shall report the same through the application or WhatsApp number, as the case may be, providing the following details: -

(a)            Name of the customer:

(b)            CNIC of the Customer;

(c)            Mobile Number of the Customer;

(d)            IBAN of the Customer;

(e)            Proof of digital payment;

(f)             Picture of the unverified invoice; and

(g)            GPS Tagged picture of the business premises that has issued unverified invoice

Provided that if the proof of digital payment is not provided by the customer, the right to claim the prize shall stand forfeited.

(5) In case of unverified invoice, an alert shall be generated in the IRIS login of the Commissioner Inland Revenue and he shall authenticate the unverified invoice to establish the entitlement or otherwise of the customer for the prize.

Provided that the Commissioner shall also take necessary action in terms of S.No.24 in the Table of section 33 of the Act

(6) In case the particulars, as provided by the customer are found incorrect or incomplete at any stage, the onus for delay in the disbursement of prize shall rest with the customer.

(9) The total prize money and the denomination of the prizes shall be decided on by the Board.

150ZEO. Procedure for sealing of business premises of integrated tier-1 retailers. The business premises of such person as mentioned in sub-rule (1) of rule 150ZEN shall be liable to be sealed in the manner prescribed as under:-

(1)       the Commissioner Inland Revenue, in whose territorial jurisdiction the business premises of tier-1 retailer is located, may initiate proceedings for sealing of the business premises on the basis of information that such person was found involved in the issuance of tax invoice that does not carry the invoice number or QR Code as prescribed, bears duplicate invoice number or counterfeit QR Code, the invoice is defaced, or there is any other evidence of tempering;

(2)       The information referred to in sub-rule (1) may be acquired in the following manner:-

(i)        reported as unverified on “Tax Asaan” application or POS Dashboard;

(ii)       physically available or acquired through mystery shopping as referred to in sub- section

(2) of section 56C of the Act; or

(iii)      through any other reliable source.

(3)       The Commissioner Inland Revenue concerned shall verify any invoice through invoice number or QR code before declaring it unverified;

(4)       Where the Commissioner Inland Revenue has evidence as provided under sub-rule (3), that a tier-1 retailer has either issued three unverified invoices in a day or five unverified invoices in seven days against a single STRN involved in issuances of unverified invoice. or if store becomes disconnected with the FBR data base for forty eight hours. or invoices of offline period not entered in the system in next twenty four hours or device does not keep record of invoices during offline period, as the case mav be, the Commissioner Inland Revenue shall seek the approval of the Chief Commissioner Inland Revenue in writing for sealing of the retailer’s business premises besides mentioning the team of officers and officials that shall carry out the process of sealing of the said business premises:

Provided in case the unverified invoices belong to a business premises of tier-1 retailer having jurisdiction in some other field formation, the Commissioner Inland Revenue concerned shall seek approval from the Chief Commissioner Inland Revenue in whose jurisdiction the integrated tier-1 retailer falls besides mentioning the team of officers and officials that shall carry out the process of sealing of the said business premises;

(5)       The Chief Commissioner Inland Revenue, in whose jurisdiction the integrated tier-1 retailer falls, shall on receipt of request for approval as mentioned in sub-rule (4), issue an order in writing for allowing or disallowing the sealing of such business premises after recording the reasons therein either allow or disallow the sealing of such business premises, and, in case of allowing sealing of business premises, shall also notify the team for carrying out the process of sealing immediately:

Provided where the jurisdiction of tier-1 retailer falls in some other field formation, the concerned Chief Commissioner shall request the Board for notification of the team;

(6)       The Chief Commissioner Inland Revenue in whose jurisdiction the integrated tier-1 retailer falls, shall decide whether one or more branches are to be sealed depending on the unverified invoices issued by the respective branches; and

(7)       The sealing order shall be communicated by the concerned Chief Commissioner Inland Revenue to the Member (IR-Operations) for information and a copy thereof shall be sent to Chief (POS) for record.

(8) The business premises of the registered person mav be sealed on any violation made bv registered person.

150ZEP  Procedure for sealing of business premises of non-integrated tier-1 retailers

The business premises of such person as mentioned in sub-rule (2) of rule 150ZEN shall be liable to be sealed in the manner prescribed as under:-

(1)       The Officer Inland Revenue, not below the rank of an Assistant Commissioner, having territorial jurisdiction, shall report in writing the non-integration of tier-1 retailer, in violation of sub-section (9A) section 3(9A) of the Act, to the Commissioner Inland Revenue concerned, recommending initiation of sealing of business premises under S.No. 25A of section 33 of the Act;

(2)       The Commissioner Inland Revenue concerned after conducting inquiry shall forward the report to the Chief Commissioner Inland Revenue, citing cogent reasons for recommending sealing of business premises besides mentioning the team of officers and officials that shall carry out the process of sealing of the said business premises:

Provided where non-integrated tier-1 retailer falls in the jurisdiction of some other field formation, the Commissioner Inland Revenue concerned shall seek approval from the Chief Commissioner Inland Revenue in whose jurisdiction the non-integrated tier-1 retailer falls besides mentioning the team of officers and officials that shall carry out the process of sealing of the said business premises;

(3)       The Chief Commissioner Inland Revenue concerned shall issue an order in writing for allowing or disallowing the sealing of such business premises after recording the reasons therein, and, in case of allowing sealing of business premises, shall also notify the team for carrying out the process of sealing immediately:

Provided where the jurisdiction of tier-1 retailer falls in some other field formation, the concerned Chief Commissioner shall request the Board for notification of the team; and

(4)       The sealing order shall be communicated by the concerned Chief Commissioner Inland Revenue to the Member (IR-Operations) for information and a copy thereof shall be sent to Chief (POS) for record.

150ZEQ Procedure for de-sealing of business premises of integrated tier- 1 retailers

Where business premises have been sealed under rule 150ZEO, the procedure for de-sealing of business premises shall be as under:-

(1)       The Commissioner Inland Revenue having jurisdiction over the case shall impose a penalty as provided under serial No. 24 of section 33 of the Act and ensure its payment. De-sealing order of the business premises shall be issued by the concerned Commissioner Inland Revenue within one day of the payment of penalty;

(2)       The Commissioner Inland Revenue shall ensure software audit of all POS machines installed in all the branches of such retailer within three working days after de-sealing of the business premises;

(3)       The Commissioner Inland Revenue shall ascertain the exact quantum of under-declared sales as a result of software audit and create a demand of tax sought to be evaded; and

(4)       Once the penalty imposed has been recovered, any demand created as a result of software audit shall not impede de-sealing of the business premises provided that the software bug has been removed and all requirements of Chapter XIV-AA of Sales Tax Rules, 2006 have been fulfilled by the integrated tier-1 retailer.

150ZEQ Procedure for de-sealing of business premises of integrated tier- 1 retailers

Where a business premises has been sealed under rule l50ZEO. the following procedure for de-sealing thereof shell be adopted. Namely:-

(i) the Commissioner lnland Revenue having jurisdiction over the case shall impose a penalty by passing an order as provided under serial No.24 of section 33 of the Act:

(ii) de-sealing order of the business premises shall be issued by the concerned Commissioner Inland Revenue within 24 hours of the payment of penalty and the demand created during audit, nothing shall impede de-sealing of the business premises provided that the software bug has been removed and all requirements of Chapter XIV-AA of Sales Tax Rules. 2006 have been fulfilled by the integrated tier- I retailer:

(iii) the registered person may file appeal against the order:

(iv) the Commissioner Inland Revenue shall ensure software audit through an integrator of all POS machines installed in all the branches of such retailer within three working days after de-sealing of the business premises. 'Ihe Commissioner Inland Revenue shall ensure to record the sale during that period:

(v) the Commissioner Inland Revenue shall ascertain the exact quantum of under-declared sales as a result of software audit and create a demand of tax sought to be evaded: and

(vi) in case of non-payment. de-sealing shall be done after a month and business premises shall be re-sealed after fifteen days. If default continues."; and

150ZER Procedure for de-sealing of business premises of non-integrated tier-1 retailers

Where business premises have been sealed under rule 150ZEP, the procedure for de-sealing of business premises shall be as under:-

(1)       The Commissioner Inland Revenue having jurisdiction shall impose a penalty prescribed under serial No. 25A of section 33 of the Act and ensure its payment;  The Commissioner Inland Revenue having jurisdiction shall impose a penalty by passing an order prescribed under serial No. 25A of section 33 of the Act:

(2)       The business premises of non-integrated tier-1 retailer shall remain sealed till the payment of penalty and integration of all POS machines installed in all its branches or outlets;

(3)       The integration process shall be carried out in presence of FBR team constituted for this purpose by the respective Commissioner Inland Revenue having jurisdiction. In order to ensure error-free integration of tier-1 retailer, the team so constituted shall include a technical person:

Provided where the jurisdiction of tier-1 retailer falls in some other field formation, the concerned Chief Commissioner shall request the Board for notification of the team; and

The FBR issued SRO 164(I)/2025 on 17.2.25, introducing amendments to the Sales Tax Rules, 2006 under the STA, 1990. The key changes include:

D.   Kasbati & Co Recommendations

Owing to the above and for Tax, Levies, Corporate Compliance & Savings, we recommend your team member to attend the following Workshop and Courses.

1.   Indirect Tax Workshops in April 

2.   Kasbati & Co Courses 

Moreover, we recommend for your Long-term Team Members to attend Certificate of Tax Management Courses, Physically at Karachi and Online for Karachi Lahore, Islamabad, etc. Click here for Flyers and Tentative Linkes for each of the following Courses.

3. More Details about Workshop & Courses

For more details, please contact Mr Abid or Moosa at UAN # 0331 1118 786 & Mobile no. 0335 2204 786 email TO: abid@professional-excellence.com With CC: amsal@kasbati.co, info.kasbati@professional-excellence.com.

E.   Further Details & Services 

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Advisory, Statement or Return Filing or Review services, or related accounting matters like the above, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com. Your Goodself may continue to get other services from your current Tax & Legal Advisors.