Sales tax on goods vs services in Pakistan: who administers what

Two sales tax systems

Pakistan’s constitutional arrangement gives the federal government the power to tax goods, while sales tax on services is generally a provincial subject. As a result, a business may deal with different authorities, laws, portals and return formats depending on what it sells.

Goods: FBR

Sales tax on the supply and import of goods is levied under the Sales Tax Act, 1990 and administered by the Federal Board of Revenue. Registration and monthly returns are handled through FBR’s IRIS system.

Services: the provinces and ICT

Where the service is provided	Authority
Punjab (including Rawalpindi)	Punjab Revenue Authority (PRA)
Sindh	Sindh Revenue Board (SRB)
Khyber Pakhtunkhwa	Khyber Pakhtunkhwa Revenue Authority (KPRA)
Balochistan	Balochistan Revenue Authority (BRA)
Islamabad Capital Territory	Federal Board of Revenue (FBR)

Each authority publishes which services are taxable, the applicable rates and its registration and return procedures.

What this means for Rawalpindi and Islamabad businesses

The twin cities sit in different jurisdictions. A service business operating from Rawalpindi generally looks to PRA, while one operating in Islamabad generally looks to FBR for sales tax on services. A business supplying goods registers with FBR regardless of city. Businesses operating across both cities, or across provinces, should check whether multiple registrations apply.

Practical steps

1. List what you supply — goods, services or both — and where.
2. Check whether your services are taxable under the relevant provincial or ICT law.
3. Register with each applicable authority and file returns for each.

We can assess this for you — see sales tax registration and sales tax return filing.

This article is general information, not advice for your specific circumstances. See our disclaimer.