A. Background (BG)

1. This refers to the related Important TLQCs in trail, blue, italic and double Line (a) 3250 of 28.8.25 about E-Invoicing & Integration: LTBA requested for Extension & KC Views (b) 3249 of 28.8.25 about LTBA meeting details on Six issues (c) 3227 of 4.8.25 about E-Invoicing & Integration New Deadlines for all Registered Persons - SRO 1413

2. We also refer to several Others TLQC including (a) 3225 of 1.8.25 about E-Invoicing & Integration - PHC hearing on 6.8.25 (b) 3218 of 27.7.25 about E-Invoicing & Integration - LHC Interim stay (c) 3201 of 14.7.25 about E-Invoicing & Integration adverse action restrained - PHC interim order (d) 3187 of 5.7 25 about FST Invoice Electronic Integration - Get Free from PRAL & KCV (e) 3096 of 28.4.25 about FST Invoice Integration by all & Major Issues

B. Updated Commentary

1. Further to KQU 3537, being an important matter, we would inform you about FBR to Issue Penalty Notices Over Failure to Integrate Invoicing System (Attachment 3263.1) in the ensuing paragraph, in Italic with emphasis in bold & Underline, heading ours for quick reading.

2. The FBR has legally authorized its field formations to impose a penalty of Rs 500,000 on all sales tax registered persons who fail to integrate their invoicing systems with the FBR by 1.9.25.

3. After granting multiple extensions, the FBR has set 1.9.25, as the final deadline for the issuance of fully integrated electronic invoices.

4. These invoices must carry the FBR’s invoice number, QR code, and official logo. The requirement applies to all importers, public companies, and businesses with an annual turnover exceeding one billion rupees during the last twelve Sales Tax Returns.

5. Further to above & KQU 3536,  about FBR begins Penal Action over Digital Invoice Non-compliance (Attachment 3263.2) FBR’s statutory powers under the Sales Tax Act, 1990 authorize monetary penalties starting at Rs 500,000 for each instance of non-compliance. Repeated violations will trigger escalating penalties of Rs 1,000,000, Rs 2,000,000, and Rs 3,000,000, making strict adherence crucial for

all sales tax registered entities.

6. Experts have warned that any Sales Tax invoice issued outside the FBR-approved system will be treated as invalid. Consequently, buyers will be unable to claim input tax adjustments on purchases backed by such unverified invoices. This poses significant operational and financial risks for businesses yet to complete integration.

7. While large corporations are expected to have the technical capacity to align with FBR requirements, small and seasonal importers face challenges in adapting quickly. Many cite limited resources, lack of training, and ongoing disruptions caused by severe flooding across Pakistan as barriers to timely compliance.

8. Industry professionals are urging FBR to provide additional relief by extending the final integration deadline. They argue that a brief grace period could prevent abrupt penalties and allow smaller entities to implement digital invoice systems effectively.

9. Nevertheless, FBR officials stress that the measure is critical to eliminating fraudulent invoicing practices and improving revenue transparency. Registered taxpayers are advised to expedite their compliance processes to avoid heavy financial consequences and ensure smooth business operations.

C. 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 Statement, Advisory, Return Filing or Review services, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com, asif.s.kasbati@professional-excellence.com.

Best regards for Here & Hereafter

Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner 

Kasbati & Co (1400+ Tax, Levies, Companies, Economy, Inflation, HR, Banking, Finance, etc

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