Digital invoicing system: Registered taxpayers adopting cautious approach: FBR

ISLAMABAD: The Federal Board of Revenue (FBR) has found that a large number of sales tax registered persons are adopting cautious approach for selection of digital invoicing system for their businesses for integration with the FBR’s system.

Sources told Business Recorder that the electronic filing of Sales Tax returns facilitated the registered taxpayers in electronically declaring their purchases, sales, imports and exports through Annexures-A, B, C and D of sales tax return form respectively.

The e-filing process allowed the registered persons to enter their sales and purchase data manually or by attaching an excel file format prescribed by FBR.

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Through this initiative of FBR and Pakistan Revenue Automation Limited (PRAL), filing of returns and taking input credit became very convenient.

Officials said it is worth mentioning that the process of e-filing in this manner was developing the foundation and building confidence in the taxpayers towards e-readiness for both the registered persons as well as the tax officers.

With the help of e-filing system developed by PRAL, the Inland Revenue wing of FBR gained digital empowerment in further facilitating the compliant taxpayers and effective enforcement against the defaulters.

As such, under the prevailing practice of e-Filing of Sales Tax returns after close of a tax period (i.,e the reporting month) the registered persons were still facing the issues in claiming the input credit pertaining to those invoices for which their buyers have not yet filed their returns for the respective period.

This issues of late reporting, under reporting and non-reporting by registered persons create problems for their buyers in timely claiming the input credit hence most of the time they even do not declare their sales in a timely manner hence such sales remain hidden from FBR, officials added.

Now, FBR vide SRO 1413(I)/2025 dated August 1, 2025 has advised all required persons to start issuing the Digital Invoices by integrating their Invoicing System with FBR.

As required under the SRO.1413, all the registered persons will start issuing the invoices digitally latest by 1 st December, 2025.

Hence, when all the sales invoices will be issued in real time meaning thereby that before issuance of any invoice, the seller will be required to submit invoice data to FBR electronically and get a unique 22-Digits invoice number to be printed on his Digital Invoice along with associated QR-Code and “Digital Invoicing” logo prescribed by FBR.

In this manner, all the purchasers including Federal, Provincial Departments, Autonomous bodies, Private and Public companies and all other registered persons will have to verify the Invoices raised by their suppliers from FBRs system before making payments.

Moreover, registered buyers will be able to get their input credits automatically from the FBRs system without any delay.

The FBR has so far issued license to three companies to act as Digital Integrators who can charge up to one Million Rupees per year as integration charges from their customers.

Moreover, the PRAL has also been declared as Digital Integrator who will provide the integration services free of any cost. Role of these integrators is to provide necessary mechanism and a robust platform to the businesses for integration of their Invoicing System with FBR, whereas each registered person will have to purchase a new or modify its existing invoicing system to be used in this integration process.

Registered persons comprising of companies, AOPs and Individuals are currently using various methods of preparing invoices. Some of the well established businesses use standard ERP solutions and some of those have got indigenously developed invoicing system whereas large majority is still using MS Word or purely manual invoicing books.

In order to therefore facilitate all the registered persons some companies, like Digital-Invoicing.com, E-Invoicing.pk and GentecSoft.com.pk have already launched cloud based Digital Invoicing Systems Integrate able with FBR system. Almost all of these solutions have provided three modes of Digital Invoicing, ie, Online Entry, Excel Sheet Based, and direct Integration with existing ERP System.

Experts are of the view that registered persons should take special care while selecting the Digital Invoicing system for their business; which should be developed by tax knowledgeable IT experts offering a robust and reliable system with prompt and proper support both in technical as well as tax compliance areas, FBR officials added.

Copyright Business Recorder, 2025