FBR Expands E-Invoicing Rules to All Taxpayer Categories

ISLAMABAD: The Federal Board of Revenue (FBR) has broadened the scope of regulations concerning e-invoicing and the integration of sales transactions. These updated rules now 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 has introduced a revised set of guidelines for e-invoicing and sales transaction integration through 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 integrate their hardware and software systems with the FBR’s computerized system for generating and transmitting e-invoices.

However, many businesses are now facing uncertainty as they try to determine whether this new system applies to Fast-Moving Consumer Goods (FMCG) companies specifically, or to the entire taxpayer base.

E-Invoices Integration: Corporate Entities Face May 1 Deadline

Mufti elaborated that the FBR initially released SRO 1525 on November 10, 2023, which established Rule 150Q of the Sales Tax Rules 2006. According to this rule, the FBR issued SRO 28 on January 10, 2024, limiting the integration to the FMCG sector only. This initial integration requirement took effect on February 1, 2024.

Subsequently, SRO 69, dated January 29, 2025, introduced a new version of Rule 150Q. The most recent SRO 709, issued under this revised rule, brings about two significant changes: the categories of taxpayers to which the rules apply and the effective dates. Mufti asserted that because the previous version of Rule 150Q has been replaced, its corresponding SRO 28 has also been nullified.

Mufti emphasized that the previous integration requirements, which were limited to the FMCG sector, have been rescinded, and the new procedures have been extended to all categories of taxpayers (corporate and non-corporate), effective from the new deadlines in May and June 2025, depending on the case. To address the apparent confusion, Mufti suggested that the FBR should either revoke SRO 28, dated January 10, 2024, or issue a clarification before the matter is brought before higher courts for resolution.

He also criticized the FBR for providing only one week for the corporate sector to implement the new system, without consulting with stakeholders, deeming it impractical. The tax administration’s haste is further evidenced by the fact that the Sales Tax General Orders needed for the complete implementation of the system have not yet been issued by the FBR.

Mufti stressed the necessity of including all stakeholders, such as ICAP, PBC, FPCCI, and KTBA, for the effective implementation of the new framework, ensuring that all technical and legal issues are adequately addressed.