FBR Expands E-Invoicing Rules to All Taxpayer Categories

ISLAMABAD: The Federal Board of Revenue (FBR) has broadened the scope of its e-invoicing regulations and sales transaction integration to encompass all categories of taxpayers, including both corporate and non-corporate entities.

Adnan Mufti, a partner at Moore Shekha Mufti, Chartered Accountants, clarified that the FBR’s new directives for electronic invoicing and sales integration are outlined in Notification SRO 709(1)/2025, dated April 22, 2025. This SRO 709 is issued in accordance with Rule 150Q(2) of the Sales Tax Rules 2006. It mandates that both corporate and non-corporate sectors must electronically link their hardware and software systems with the FBR’s computerized system for generating and transmitting e-invoices.

However, uncertainty remains among numerous businesses struggling to determine if the updated regulations apply to Fast-Moving Consumer Goods (FMCG) companies alone or the entire taxpayer base.

E-invoices integration: FBR sets May 1 deadline for corporate entities

Mufti further explained that the initial directive, SRO 1525, dated November 10, 2023, introduced Rule 150Q of the Sales Tax Rules 2006. Following this, SRO 28, issued on January 10, 2024, limited this integration to the FMCG sector, effective from February 1, 2024.

Subsequently, SRO 69, dated January 29, 2025, presented a revised version of Rule 150Q. The recent SRO 709, issued under the revised Rule 150Q, introduces two key changes: the taxpayer categories to which the rules apply and the effective dates. Mufti asserted that since the original text of Rule 150Q has been replaced, its corresponding SRO 28 is no longer valid.

Mufti emphasized that the previous integration requirements, initially restricted to the FMCG sector, have been repealed. The updated procedures now apply to all corporate and non-corporate taxpayers, with new deadlines set for May and June 2025, depending on the case. To eliminate any ambiguity, Mufti suggested that the FBR should either revoke SRO 28, dated January 10, 2024, or issue a clarification before the matter escalates to higher courts.

He also criticized the FBR for providing the corporate sector with only a week to implement the new system, without prior consultation with relevant parties, deeming it impractical. He highlighted the tax administration’s haste, noting that the necessary Sales Tax General Orders for the scheme’s full implementation have not yet been issued by the FBR.

Mufti advocated for involving all stakeholders, including ICAP, PBC, FPCCI, and KTBA, to ensure the effective implementation of the new framework and to address any technical or legal issues.