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 incorporation of sales transactions 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 has introduced a new 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 and mandates that both corporate and non-corporate sectors electronically integrate their hardware and software systems with the FBR’s computerized system for e-invoice generation and transmission.

However, this directive has created uncertainty for numerous businesses struggling to determine whether this new system applies to Fast-Moving Consumer Goods (FMCG) companies specifically or to the entire taxpayer base.

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

Adnan Mufti further explained that the FBR initially issued SRO 1525 on November 10, 2023, which introduced Rule 150Q of the Sales Tax Rules 2006. Under this rule, the FBR then issued SRO 28 on January 10, 2024, limiting the integration to the FMCG sectors, effective from February 1, 2024.

Subsequently, SRO 69, dated January 29, 2025, replaced Rule 150Q with a new version. The most recent SRO 709, issued under the revised Rule 150Q, introduces two significant changes: the categories of taxpayers to which the rules apply and the corresponding application dates. Mufti asserted that because the previous version of Rule 150Q has been replaced, the associated SRO 28 is no longer valid.

Mufti emphasized that the prior integration requirements, previously limited to FMCG sectors, have been revoked, and the new procedures now extend to all corporate and non-corporate taxpayers, with new deadlines set for May and June 2025, depending on the case. To resolve this confusion, Mufti suggested that the FBR should either rescind SRO 28, dated January 10, 2024, or issue a clarifying statement before the matter leads to litigation in higher courts.

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

Mufti emphasized the necessity of involving all stakeholders, including the ICAP, PBC, FPCCI, and KTBA, to effectively implement the new framework, ensuring that all technical and legal issues are adequately addressed.