Should you be GST registered?
Sales Tax Registration Criteria in Pakistan Who Needs to Register? If you want to do business in Pakistan and want to know whether it is mandatory to register for sales tax or not, then this blog post is for you.
If a person is engaged in making of taxable supplies in Pakistan, then he is required to obtain STRN. All supplies are taxable goods, except those given in the Sixth Schedule of the Sales Tax Act 1990 which deals with exempt goods.
In summary, if you deal only in exempt supplies, then you are not required to register for GST but if you are dealing in both exempted and taxable goods then it is mandatory to registered.
Manufacturers:
All types of manufacturers are required to be registered for sales tax, except those:
- Do not have an industrial gas or electricity connection.
- Located is in a residential area.
- Total workforce does not exceed 10 employees.
- Total supply does not exceed Rs. 8 million.
Exporters
All exporters who want to claim their input tax (which they have paid on zero-rated supplies) in the form of refund are also required to register.
Other cases:
Similarly, registration in sales tax is also mandatory for Importers, wholesale distributors and dealers.
In addition, if GST registration is mandatory under any federal or provincial law of Pakistan, then the concerned business is required to get registered.
Businesses that deal in exempt goods in Pakistan but want to import or export are also required to be register.
Tier-1 Retailers:
All retailers who fall into the following categories are also required to register:
Those operating in:
- National or international chains of stores.
- Air-conditioned shopping malls, plazas or centres.
- Eelectricity bill for the last 12 months is more than Rs. 12 lakh.
- Wholesalers cum retailers who import and supply consumer goods (whether on wholesale basis or retail basis).
- Retailers who have Point of Sale (POS) installed at their stores and accept payments through debit or credit cards and other digital payments.
236G or 236H WHT Threshold:
If a retailer’s withholding tax, deducted under section 236G or 236H, has exceeded the limit prescribed by the FBR in the last 12 months, then it will also be mandatory for him to register for GST.
How to Apply for Sales Tax Registration in Pakistan?
For registration, it is first necessary to register with the FBR and get an NTN. After this, you will be allotted a Registration Number (STRN). After completing this step, you have to go to the FBR’s IRIS portal and fill and file the form ‘’ 14(1) (Form of Registration filed voluntarily through Simplified) (Sales Tax)”
The following documents and information are required for registration:
Bank account details
- IBAN, bank name
- Account type
- Opening date
Business ownership:
- owned or leased/rented and shareholding percent
- Furthermore, a business centenary has to be created in which the name of the business, services provided, business group, class, subclass and principal activity must be explained.
- In this, the ‘’ST’’ option has to be selected.
- If you also want to register for Federal Excise Duty (FED), then you have to click on its option as well.
- Full details of utility bills (electricity or gas), meter number and connection reference number must be provided. Details of business permits (commercial or residential) must also be provided.
Temporary Registration:
If a person applies for sales tax registration as a manufacturer but has not yet installed machinery, he may be granted temporary manufacturer registration for a period of sixty days.
For this, he must provide a complete list of the machinery he is importing and a bill of lading or goods declaration(GD). This process will be completed within 72 hours.
During this period, it will be necessary to file monthly sales tax returns but no invoice will be issued, otherwise tax credit will not be available.
No sales tax refund will be given during this temporary registration, however, the input tax deducted will be carried forward to the next tax period.
Business Address and Assets Details:
Importantly, the address given on the business letterhead should be the same as that mentioned on the balance sheet and bank statement.
Balance sheet (which includes capital, loans, creditors, fixed assets, inventory, bank balance and other assets)
Attachments
Finally, the following attachments are required:
- Bank certificate
- Photo of utility meter
- Photo of business permits
- Photo of installed machinery for manufacturers
Biometric Verification:
The form is submitted after filing, and the final step is biometric verification at the NADRA E- Sahulat Centre. In the case of a sole proprietorship, biometric verification is undertaken by the person whose CNIC application for STRN registration was submitted.
In the case of an AOP/Partnership firm or company, the biometric verification will be completed by the Principal Officer, who is often the Managing Partner or CEO.
How to check STRN Registration:
The registration status can be easily checked. This is done through the IRIS website or the Tax Asan app, where the taxpayer can access his profile by entering his NTN. If a person is “registered for sales tax”, it will be displayed with “Yes w.e.f” along with the date of registration.
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