Failure to integrate invoicing system: FBR likely to issue huge penalty notices from today

ISLAMABAD: The Federal Board of Revenue’s (FBR’s) field formations are legally empowered to issue notices of extraordinary penalty of Rs500,000 on all those sales tax registered persons who failed to integrate their invoicing system with FBR from September 1, 2025.

After allowing many extensions by FBR for starting issuing Electronic Invoices by sales tax registered persons, the last date for complete integration and starting issuing the Digital Invoices duly bearing the FBR’s invoice number, QR code and logo of FBR is 1st September, 2025 for all Importers, Public Companies and those companies whose annual turnover exceeded one billion rupees during past twelve sales tax returns.

From September 1, 2025, the field formations of FBR can legally start issuing the first notice of penalty for Rs. 500,000/- under Section 25A of the Sales Tax Act 1990 to all those registered persons listed above who have not yet integrated their invoicing system with FBR and not started issuing Electronic Invoices.

Digital invoicing system: Registered taxpayers adopting cautious approach: FBR

The penalty will be increased exponentially as Rs. 1,000,000/-, 2,000,000/- and 3,000,000 for subsequent default and notices issued consequently.

Experts are of the view that any Sales Tax Invoices issued other than Electronic Invoices by the Importers, Public companies and those companies who declared turnover of more than Rs. 1 billion during last twelve sales tax returns will be illegal and such buyers will not be able to get input adjustments against the purchases made from such registered persons, from 1st September 2025.

It is worth mentioning here that the Public companies and the companies having annual turnover of more than one billion rupee are in a good position to integrate their invoicing system with FBR and start issuing Electronic Invoices in compliance with SRO 1413(I)/2025 hence prompt penal action by FBR on such registered persons will be justified now.

However, there are large number of small, medium and seasonal importers who are not in a position to immediately make integration arrangements and start issuing Electronic Invoices so quickly; therefore, FBR should take this aspect into consideration while initiating any penal action against them hurriedly.

Tax experts urged FBR to seriously consider extending the last date of integration and start of issuing the Electronic Invoices in general and for importers in particular, which has expired on 31st August, 2025, in view of the severe flooding across the country.

At the same time, they have advised the registered persons to integrate their invoicing system with FBR and start issuing electronic invoices without any further delay so that FBR and the compliance taxpayers jointly may curb the flying invoices in the country.

Copyright Business Recorder, 2025