A BILL to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2026, and to amend certain laws WHEREAS, it is expedient to make provisions to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2026, and to amend certain laws for the purposes hereinafter appearing;
It is hereby enacted as follows:-
- Short title and commencement. — (1) This Bill shall be called the Finance Bill, 2026.
(2) It shall, unless otherwise provided, come into force on the first day of July, 2026.
- Amendments of the West Pakistan Motor Vehicles Taxation Act, 1958 (WP Act XXXII of 1958).- In the West Pakistan Motor Vehicles Taxation Act, 1958 (WP Act XXXII of 1958) as in force in the Islamabad Capital Territory, in the Schedule, for the Tables 2, 3, 4 and 5, the following shall be substituted, namely:-
“SCHEDULE
[see section 3]
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Table 2
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S.No Category Tax Rates for ICT
(1) (2) (3)
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1 Engine capacity upto 1000 CC 20,000
2 Engine capacity from 1001 to 1300 cc 0.25 % of Invoice Value
3 Engine capacity from 1301 to 1500 cc 0.25 % of Invoice Value
4 Engine capacity from 1501 to 2000 cc 0.25 % of Invoice Value
5 Engine capacity from 2001 to 2500 cc 0.35 % of invoice Value
6 Engine capacity from 2501 and above 0.35 % of invoice Value
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Table 3 Motor Cabs
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S.No Category Tax Rates for ICT
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(1) (2) (3)
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1 Engine capacity upto 1000 CC 600
2 Exceeding 1000cc but not more than 1300cc 1,000
3 Exceeding 1300cc but not more than 1500cc 1,700
4 Exceeding 1500cc but not more than 2000cc 2,500
5 Exceeding 2000cc but not more than 2500cc 3,400
6 Exceeding 2500cc 4,200
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Table 4
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Public Service Vehicle
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S.No Category Tax Rates in ICT Per
seat per annum
(1) (2) (3)
1 Vehicle (8 seater) 350
2 Vehicle (13 seater) 400
3 Vehicle (15 seater) 500
4 Vehicle (16 seater) 600
5 Vehicle (42 seater) 700
6 Vehicle (52 seater) 850
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Table 5
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Commercial Vehicle/Loading Vehicles
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S.No Category Proposed Rates
(1) (2) (3)
1 Vehicles not exceeding 1250 KG in
laden weight 500
2 Vehicles with maximum laden capacity
exceeding 1250 KG but not
exceeding 2030 KG 1,000
3 Vehicles with maximum laden capacity
exceeding 2030 KG but not
exceeding 4060 KG 1,000
4 Vehicles with maximum laden capacity
exceeding 4060 KG but not exceeding
6090 KG 6,600
5 Vehicles with maximum laden capacity
exceeding 6090 KG but not
exceeding 8120 KG 6,600
6 Vehicles with maximum laden capacity
exceeding 8120 KG 12,000
7 Vehicles with maximum laden capacity
exceeding 8120 Kg, but not
exceeding 12000 Kg 12,000
8 Vehicles with long trailers or other
vehicles with maximum laden capacity
exceeding 12000 Kg, but not
exceeding 16000 Kg 18,000
9 Vehicles with long trailers or other
vehicles with maximum laden capacity
exceeding 16000 Kg 24,000
10 Tractor (With trolley) 2,600
11 T ractor (Without trolley) 2,600.”.
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-
Amendments of the Petroleum Products (Petroleum Levy and Climate Support Levy) Ordinance, 1961 (XXV of 1961).- In the Petroleum Products (Petroleum Levy and Climate Support Levy) Ordinance, 1961 (XXV of 1961), the following further amendments shall be made, namely:—
-
in section 2,-
(a) for clause (1), the following shall be substituted, namely:-
“(1) “company” means an oil marketing company and includes a person engaged in the manufacturing, refining or reclaiming of lubricating oil from used lubricating oil under a license granted by OGRA;”;
(b) after the omitted clause (4D), the following new clauses shall be inserted, namely:
“(4E) “Oil Marketing Company” means a company, other than lubricant marketing company, engaged in purchasing or obtaining of petroleum products from refineries or blending plants or through sources abroad for selling, distributing or marketing, directly through his agents or dealers at his dispensing outlets or filling stations; and (4F) “OGRA” means the Oil and Gas Regulatory Authority of Pakistan established under the under the Oil and Gas
Regulatory Authority Ordinance, 2002 (Ordinance XVII of 2002);”;
(c) for clause (7), the following shall be substituted, namely:-
“(7) “refinery” means a facility or industrial plant where crude oil is refined to produce petroleum products.”;
- in section 3,-
(a) for sub-section (1), the following shall be substituted, namely:- “(1) The payment of Petroleum Levy and Climate Support Levy shall deemed to be a license condition of every company, refinery or licensee from the date of issue of license by OGRA and such company, refinery or licensee shall pay to the Federal Government, Petroleum levy and Climate Support Levy on petroleum products at such rates as may respectively be notified by the Federal Government in the official Gazette, from time to time.”; and
(b) sub-section (3) shall be omitted;
- after section 3A, the following new sections shall be added, namely:- “3B. Late payment surcharge.— (1) Where any amount of the Petroleum Levy and Climate Support Levy are not paid within the prescribed due date i.e. the date of filing of Sales Tax or Federal Excise Returns in case of local production and date of payment of custom duty in case of imported products, the defaulting company, refinery or licensee shall, in addition to the amounts due, be liable to pay late payment surcharge calculated in the manner as specified in sub-section
(1) of section 40D of the Public Finance Management Act, 2019.
3C. Recovery of amounts due under this Ordinance.— (1)
Notwithstanding anything contained in the Public Finance Management Act, 2019 and subject to sub-section (2) of this Act, if the Petroleum Levy and Climate Support Levy due or the late payment surcharge are not paid within ninety days, the relevant department responsible for collecting the Petroleum Levy and Climate Support Levy under subsection (2) of section 3A of this Act, may request the Commissioner (Inland Revenue) to exercise powers of recovery in the same manner as income tax arrears under Part IV of Chapter X of the Income Tax Ordinance, 2001 (XLIX of 2001) or rules made thereunder in this behalf: Provided that the Commissioner (Inland Revenue) shall have no authority to grant extension of time to the notice of recovery or allow payments of outstanding levies under this Ordinance including late payment surcharge in instalments of equal or varying amounts.
(2) The relevant department under sub-section (2) of section 3A of this Act, as it deems fit and proper, may either, separately or simultaneously, initiate recovery of the Petroleum Levy and Climate Support Levy, or, the late payment surcharge, as the case may be.
(3) Any irregularity or infirmity in the recovery proceedings under this section shall not be grounds of challenge before a tribunal or courts of law.
(4) The Commissioner (Inland Revenue) shall be bound to submit a report every fortnight to the divisions concerned to whom subjects of finance and petroleum are allocated under the Rules of Business, 1973
on the progress of recovery proceedings, and failure to recover the amounts due shall be explained in writing.
(5) Prior to commencement of the Finance Act, 2026, where any amount of the Petroleum Levy and Climate Support Levy or the late payment surcharge are due under sections 40B and 40D of the Public Finance Management Act, 2019, it shall be recoverable under this section.”;
- after section 4, the following new section (4A) shall be inserted, namely:- “4A. Mandatory reporting mechanism for petroleum levy and climate support levy payments.— (1) Every company, refinery or licensee under this Ordinance shall submit monthly statement regarding the payment of the Petroleum Levy and Climate Support Levy on sale of petroleum products. The statement shall be supported by documentary evidence including monthly sales invoice submitted to the Federal Board of Revenue established under the Federal Board of Revenue Act, 2007 (Act No. IV of 2007) including any other document required by the relevant department from time to time.
(2) Every company, refinery or licensee under this Ordinance shall furnish an annual audited certificate to the Petroleum Division, issued by the Authorized Audit Firm, certifying the accuracy of the levy and or levies accrued and paid under this Ordinance.
Explanation: For purposes of this section, Authorized Audit Firm means an audit firm registered with the Audit Oversight Board under the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997).
(3) The costs and expenses of such audit shall be borne solely by the relevant company, refinery or licensee.”;
- Omission of the Second Schedule, Ordinance XXV of 1961.- In the
said Ordinance, the Second Schedule shall be omitted.
- Omission of the Fourth Schedule, Ordinance XXV of 1961.- In the
said Ordinance, the Fourth Schedule shall be omitted.
- The Customs Act, 1969 (IV of 1969).- In the Customs Act, 1969 (IV of 1969), the following further amendments shall be made, namely: —
(1) in section 2, after clause (ssss), a new clause shall be added, namely: - “(ssssa) “State warehouse” means any place authorized by the Collector of Customs to store the detained, seized or confiscated goods, as the case may be”;
(2) in section 19, in sub-section (5), in the second proviso, for the figure “2026”, the figure “2027” shall be substituted;
(3) in section 32, —
(a) in sub-section (3), in the first proviso, the words “in a case” shall be omitted; and
(b) in sub-section (3A), in the proviso, the words “in a case” shall be omitted;
(4) in section 80, in sub-section (4), —
(a) after the word “examined”, a comma shall be inserted and thereafter the word “scanned” shall be inserted; and
(b) in the proviso, after the word “examined”, the words “or scanned” shall be inserted;
(5) in section 82, —
(a) in sub-section (1), —
(i) for the words “Federal Government”, the word “Board” shall be substituted; and
(ii) in the first proviso, after the word “waive”, the words “or reduce” shall be inserted and for the full stop at the end a colon shall be substituted and thereafter the following new proviso shall be added, namely: -
“Provided further that the Board may notify the rules to regulate the implementation of above provisions, including the process of appeal against imposed penalties and the Customs stations, goods or class of goods, where the provisions of sub-section (1) shall not be applicable.”; and
(b) in sub-section (2), after the fifth proviso, the following new proviso shall be added, namely; -
“Provided also that the Board may authorize any person, to auction any auctionable goods, in the manner as notified by the Board.”;
(6) in section 156, in sub section (1), in the Table. —
(a) against S.No. 7A, in the third column, for the words “five hundred thousand”, the words “ten million” shall be substituted;
(b) after S.No.62, the following S.No. shall be added, namely: -
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“62 A If any person is found to such person shall be liable
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General
be involved or abetting in to a penalty not exceeding
the removal, substitution, two times the value of the
damage or otherwise goods involved; and upon
tempering with any conviction by a Special
goods, whether or not Judge, shall further be
confiscated, at any such liable to imprisonment for a
place as authorized by period not exceeding five
the Collector as a State years, or fine or the both.”;
Warehouse.and
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(c) against S.No. 83, in the second column, for the existing entry, the
following shall be substituted, namely: —
“If an officer of any authority who is duty bound under section 170 to deposit the impugned goods with customs, neglects so to do.”;
(7) in section 157, after sub-section (2), the following explanation shall be added, namely: —
“Explanation: — The word “removal” includes, and shall be deemed to have always included, every act of carrying, transporting, depositing, harbouring, keeping, concealing, retailing, or any other act involving movement of smuggled goods.”;
(8) for section 170, the following shall be substituted, namely: —
“170. Procedure in respect of goods seized or detained by other authorities.- Notwithstanding anything contained in any other law for the time being in force, when any goods liable to confiscation under this Act are detained or seized by any other authority on any violation, irrespective of any pending proceedings under the laws of that authority, the customs authorities upon confirmation that such goods are liable to confiscation shall intimate that authority in writing and that authority shall be bound to deposit the impugned goods with customs for further processing under this Act.”;
(9) in section 179, after sub-section (5), the following sub-section shall be added, namely: —
“(6) Notwithstanding anything contained in this Act, or any other law for the time being in force, the Board may notify a procedure for faceless adjudication whereby adjudication proceedings shall be conducted without any face-to-face interaction between the adjudicating officer and the respondent. The virtual mode shall be in such manner as may be prescribed by the Board from time to time.”;
(10) in section 185A, after sub-section (5), the following sub-section (6) shall be added, namely: —
“(6) Where a Special Judge during trial of an offence punishable under this Act, is satisfied that there is any reasonable grounds for believing that the accused has committed an illegal transfer of funds into or out of Pakistan, he may order the freezing of the assets of the accused, whether in his possession or in the possession of any other person on his behalf.”;
(11) after section 196J, the following section shall be added, namely; — “196JJ. Independent case scrutiny committee.- (1) Any Civil petition, reference, civil petition for leave to appeal or review petition before the High Court, the Federal Constitutional Court or the Supreme Court of
Pakistan shall only be filed by the Collector or Director of Customs, or any officer of Customs not below the rank of Deputy Collector or Deputy Director authorized by the Collector or Director of Customs, in writing, subject to approval by an independent case scrutiny committee, as constituted by the Board under sub-section (3).
(2) The Board may constitute one or more such committees and assign them jurisdiction which shall exercise the powers and functions in a manner, and from the date, as may be notified by the Board.
(3) The independent case scrutiny committee shall comprise of the following Members, namely: —
(a) a retired judge of superior judiciary who shall also act as Chairman of the Committee;
(b) an advocate having not less than fifteen years of experience in customs and commercial litigation before the High Court or Supreme Court of Pakistan; and
(c) a serving or retired officer not below the rank of Director or Collector of Customs.
(4) The members shall receive such renumeration as may be prescribed by rules.
(5) Recommendations of the committee shall be binding upon the concerned Collector or Director of Customs.
(6) No suit, prosecution or other legal proceedings shall lie against the members of the committee in relation to the decisions made under this section.”;
(12) in section 215, in clause (c), for the full stop at the end, the expression “ ;or ” shall be substituted and thereafter the following new clause shall be added, namely: —
“(d) in the manner prescribed for service of a summons under the Code of Civil Procedure, 1908 (Act V of 1908).”;
(13) The amendment set out in the First Schedule to this Act shall be made in the First Schedule to the Customs Act, 1969 (IV of 1969): and
(14) The Fifth Schedule to the Customs Act, 1969 (IV of 1969), shall be substituted in the manner provided for in the Second Schedule to this Act.
- Amendments in the Sales Tax Act, 1990.— In the Sales Tax Act, 1990 (VII of 1990), the following further amendments shall be made, namely: -
(1) in section 2,-
(a) after clause (1A), the following new clauses shall be inserted, namely:-
“(1AA) “advance receipt invoice” means an invoice in the format as may be notified by the Board from time to time; (1AAA) “algorithmic settlement mechanism” means algorithmic settlement mechanism provided under section 26AAA of this Act”
(b) after the omitted clause (9AA), the following new clause shall be inserted, namely:-
“(9AB) “electronic invoicing system” means such electronic system or mechanism as may be prescribed or approved by the Board for issuance and recording of sales tax invoices in electronic form;”;
(c) after clause (17), the following new clause shall be inserted, namely:-
(17A) “National faceless centre” means National faceless centre as defined in section 32C of the Act;”;
(d) after clause (22), the following new clause shall be inserted, namely:-
“(22)(1A) “production monitoring system” means any system or technology, used for the purposes of monitoring production and sale of goods, whether in real-time or otherwise, including such systems or technologies as may be prescribed by the Board from time to time;
(e) in clause (43A),-
(i) in sub-clause (d), after the expression, “wholesaler-cum- retailer”, the expression “having turnover more than two hundred million” shall be inserted;
(ii) sub-clauses (f) and (g) shall be omitted;
(iii) after omitted sub-clause (ga), the following new sub-clause shall be inserted, namely:-
“(gb) a retailer having turnover exceeding two hundred million rupees either by way of declaration or from worked back value of turnover from tax deduction under section 236G or 236H of Income Tax Ordinance, 2001 (XLIV of 2001) during the immediately preceding twelve consecutive months; and” and
(iv) in sub-clause (h), for full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-
“Provided that the Board may also exclude any person or class of persons through a notification in the official gazette.”.;
(f) in clause (44), after sub-clause (a), the following explanation shall be added, namely:-
“Explanation.- For the removal of doubt, the term goods are delivered or made available mean the goods become ready for dispatch from the business premises including but not limited to factory, warehouse, godown or branch.”; and
(g) in clause (46), in sub-clause (j), in the first proviso, at the end, for the colon, the full stop shall be substituted and thereafter the following expression shall be added, namely:-
“For this purpose of valuation, the Board may use the valuation of such goods as notified by Pakistan Bureau of Statistics immediately before the start of tax period. The Board may also where deems fit outsource the functions of valuation of goods to third party in the mode and manner as may be prescribed:”;
(2) in section 6, in sub-section (2), after the first proviso, for full stop at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely:-
“Provided further that in the case of steel melters, steel re-rollers and composite units, the tax shall be collected on the basis of per unit electricity consumption at the rate as prescribe by the Board, through notification in the official Gazette. The tax so collected shall be adjustable and the excess amount, if any, shall be refunded on monthly basis through Board’s automated refund system to those registered persons who integrate with the Board’s prescribed production monitoring and digital invoicing systems.”;
(3) in section 8B, in sub-section (1), in the second proviso, for full stop at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely:-
“Provided further also that the Board may by notification in the official Gazette, reduce or enhance the limit provided in this sub-section for any registered person on the basis of compliance or non-compliance with the production monitoring, digital invoicing, e-bility, POS, or any other electronic system prescribed by the Board for digital integration of data.”;
(4) in section 9, for full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-
“Provided that the issuance of debit and credit notes shall be governed by the mechanism including electronic adjustments, as may be prescribed by the Board.”;
(5) after section 11G, the following new section shall be inserted, namely:- “11H. Faceless audit and assessment.- (1) Notwithstanding anything to the contrary contained in any other provision of this Act, any audit under sections 25 and 72B, any order made under section 11E, and rectification under section 57 with respect to the cases referred to in subsection (2), may be made in a faceless manner as may be prescribed by the Board from time to time.
(2) The faceless assessment under sub-section (1) shall be made in respect of such persons or class of persons, or incomes or class of incomes, or cases or class of cases, as may be specified by the Board.
(3) The provisions of section 25 shall apply to the audit conducted in faceless manner under this section:
Provided that where opportunity of being heard is to be provided to the taxpayer during the course of this audit or a statement under oath is required to be obtained from a taxpayer or any other person under section 37 of this Act, the same shall be done through E-hearing:
Provided further that the identity of the officer, including facial and voice identity, conducting such E-hearing shall be kept confidential.”;
(6) in section 21, in sub-section (2), after the word “invoices”, the expression “, has committed non-compliance of sub-sections (5) and (6) of section 23 or section 40C” shall be inserted;
(7) in section 23, in sub-section (1),-
(i) for the words “supply shall issue a serially numbered tax invoice” the expression “as well as exempt supply shall issue a tax invoice
including an advance receipt invoice, bearing a verifiable and unique FBR invoice number” shall be substituted; and
(ii) in clause (b), after the Explanation, for the existing provisos, the following shall be substituted, namely:-
“Provided that the Board may notify any person or class of persons who may be allowed to issue an advance receipt invoice within the notified system:
Provided further that the condition of verifiable and unique FBR invoice number shall be applicable from a time as notified by the Board.”;
(8) in section 25,-
(i) after sub-section (8), the following new sub-sections shall be inserted, namely:-
“(8A) If, at any stage of the proceedings before him, if the Commissioner is of the opinion that having regard to, —
(a) the nature and complexity of the accounts; or
(b) volume of the accounts; or
(c) doubts about the correctness of the accounts; or
(d) multiplicity of transactions in the accounts; or
(e) specialized nature of business activity of the registered person, and interests of the revenue, is of the opinion that it is necessary so to do, he may, after giving the registered person a reasonable opportunity of being heard, and with the previous approval of the Chief Commissioner, direct the registered person to get either any or all of the following:—
(i) accounts re-audited by an accountant, and to furnish a report of such audit duly signed and verified by such accountant including answers to the specific queries as the Commissioner may require; or
(ii) inventory re-valued by a cost accountant, and to furnish a report of such inventory valuation duly signed and verified by such cost accountant including answers to the specific queries as the Officer of Inland Revenue may require; Explanation:- The accountant or the cost accountant, as referred to in this sub-section shall be nominated by the Commissioner for the purposes of the said sub-section from amongst the panel of such accountants or cost accountants nominated by the Board.”; and
(8B) After completion of the audit, the officer of Inland Revenue shall, after obtaining the registered person’s explanation on all the issues raised in the audit, issue an audit report containing audit observations and finding.”;
(ii) in sub-section (9), for the words “completion of the audit”, the words “issuing the audit report” shall be substituted; and
(iii) in sub-section (11),-
(a) for the words “wishes to deposit”, the word “deposits” shall be substituted; and
(b) in the second proviso, for the words “full amount”, the words “fifty percent” shall be substituted;
(9) after section 30A, the following new section shall be inserted, namely:- “30AA. Faceless jurisdiction. - (1) Notwithstanding anything contained in this Act, the Inland Revenue tax authorities appointed in National faceless center shall perform all or such functions, and exercise all or such powers under this Act as may be assigned to them in respect of such persons, or classes of persons, for such tax periods of a person through algorithms developed by the Board.
(2) The jurisdiction so assigned may be exclusive or concurrent.
(3) The Board may transfer jurisdictions in respect of persons or classes of persons, for a specific tax period, for which the jurisdiction has already been assigned under this section, from National faceless center to the officer of Inland Revenue having jurisdiction under section 30 of this Act, on the recommendation of the Chief Commissioner or on its own accord.
(4) The Chief Commissioner appointed in the National faceless center may request the Board to direct the officer of Inland Revenue having jurisdiction under section 30 or any other Authority under this Act, as it may deem fit, to conduct physical verification including nature and size of the business, assets, investments, expenditures, and any other information or verification required by the Chief Commissioner for conducting any proceedings assigned to the National faceless centre:
Provided that the Board may exercise its power of allocation of verification through an algorithm based system.
(5) Notwithstanding anything contained in any law for the time being in force, the identity of the authority exercising jurisdiction in the National faceless centre shall be kept confidential from the registered person, the authorized representative of the registered person, and any unauthorized person.
(6) No notice, order , or other communication by an authority appointed at the National faceless centre shall be called in question or set aside merely on the ground that such authority did not have jurisdiction over the taxpayer under section 30 of this Act, or lack of notified delegation of power under section 32 of this Act, or because of the fact that identity of the authority has been kept confidential from the taxpayer as per sub-section (5).”;
(10) after section 30DDDA, the following new section shall be inserted, namely:-
“30DDDB. Directorate General (Field Compliance) Inland Revenue.- (1) The Directorate General (Field Compliance) Inland Revenue shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors, Assistant Directors and such other officers as the Board may, by notification in the official Gazette, appoint.
(2) The Board may, by notification in the official Gazette,–
(a) specify the functions and jurisdiction of the Directorate General and its officers; and
(b) confer the powers of authorities specified in section 30 upon the Directorate General and its officers.”
(11) after section 32B, the following new section shall be inserted, namely:- “32C. National faceless centre.- (1) Notwithstanding anything to the contrary contained in any of the provisions of this Act, the Board may, for the purposes of proceedings under this Act in faceless manner, establish a National faceless center (hereinafter referred to as “the Centre”) and specify its jurisdiction, powers, and functions.
(2) The centre shall comprise a Director General and as many officers of Inland Revenue along with support staff, as the Board may deem fit for the purposes of this section.
(3) The Board may design algorithms for assigning any function or jurisdiction under this section to any of the authorities mentioned in subsection (2).
(4) The centre shall comprise as many wings and units as may be prescribed by the Board.
(5) The functions of audit, assessment, and quality control in a specific case for a specific tax period shall be performed by separate officers.
(6) All communications, among the units, or with the registered person, or an authorized representative of the registered persons, or with any other person with respect to the information or documents or evidence or any other details, as may be necessary, shall be through electronic means.”;
(12) in section 33, in the Table, in column (1),-
(a) against S. No. 1, in column (2),—
(i) for the word “ten “, the word “fifty “ shall be substituted; and
(ii) in the proviso, for the word “ hundred“, the word “ thousand “ shall be substituted;
(b) against S. No. 2, in column (2), for the expression “five thousand rupees or three per cent”, the expression “twenty-five thousand rupees or five per cent” shall be substituted;
(c) against S. No. 3, in column (2),—
(i) for the word “ten “, the word “fifty” shall be substituted; and
(ii) for the word “five”, the word “ten” shall be substituted;
(d) against S. No. 5, in column (2),—
(i) for the expression “ten thousand rupees or five per cent of the amount of the tax involved, whichever is higher”, the expression “fifty thousand rupees or five per cent of the amount of the tax involved, whichever is higher” shall be substituted; and
(ii) in the first proviso, for the word “ hundred“, the word “thousand” shall be substituted;
(e) against S. No. 7, in column (2), for the word “ten”, the word “fifty” shall be substituted;
(f) against S. No. 8, in column (2), for the word “ten”, the word “fifty” shall be substituted;
(g) against S. No. 25, in column (1) and entries related thereto in column (2), the following shall be substituted, namely:-
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- Any person, who is Such person shall be liable to pay
required to integrate a penalty up to one million rupees,
his business for if he continues to commit the
monitoring, tracking, offence after one month of the
reporting or recording imposition of first penalty, he shall
of sales, production be liable to second penalty of up
and similar business to five million rupees.
transactions with the Notwithstanding, his business
Board or its premises shall be liable to be
computerized sealed with or without imposition
system, fails to get of penalty by an officer of Inland
himself registered Revenue in the manner as may be
under this Act, and if prescribed.
registered, fails to
integrate in the
manner as required
under law within the
stipulated time as
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notified by the Board.
(h) after S. No. 28, the following new S. Nos. and entries relating thereto in columns (1), (2) and (3) shall be added, namely:—
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- Where any (i) Such person shall 2(37)
registered pay a penalty equal to
person issues a the face value of the
tax invoice for a transaction simulated or fictitious
which is simulated or invoice r invoices.
fictitious, or for which (ii) The Board shall,
no actual supply of goods after issuance of a show
or services has taken cause notice and an
place, as established after opportunity of being
notice and adjudication heard, place the name
and registration
number of such
person on a
publicly accessible
simulated invoice issuers
register maintained on
the Board's
computerized system.
(iii) Any input tax credit
claimed by a counterparty on
the basis of invoices issued
by a person on the
simulated invoice issuers
register shall be reversed
automatically and treated as
inadmissible with effect
from the date of listing.
(iv) Listing on the
register shall be removed
upon full payment of
the penalty and default
surcharge, and upon
satisfactory demonstration
of compliance.
- Where the Board’s Such person shall pay 7, 8A
computerized system a penalty of twenty
identifies that input tax per cent of the unmatched
credit claimed by a input tax amount, in
registered person in addition to reversal
respect of any tax of the inadmissible
period cannot be matched credit and payment
to corresponding output tax of default surcharge
declared by the supplier under section 34.
for the same or
proximate tax period, and
such mismatch is confirmed
after issuance of notice
and provision of opportunity
of being heard.
- Where a registered person Such person shall 7, 8A,
has claimed input tax pay a penalty of twenty 33 (S.No.29)
credit on the basis per cent of the
of invoices issued by a unreversed input
person who is subsequently tax credit, in addition
placed on the simulated to the reversal of
invoice issuers register such credit and
under S. No. 29, and default surcharge
such registered person under section 34.
fails to reverse the inadmissible
input tax credit within
sixty days of the listing of
the invoice issuer on the register.
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(13) in section 40C,-
(a) for sub-sections (2) and (3), the following shall be substituted, namely:-
“(2) From such date as may be prescribed by the Board, no taxable goods shall be removed or sold by the manufacturer or any other person unless such goods are affixed with tax stamps, band role stickers or labels are monitored through a Production Monitoring System, video analytics or any other prescribed monitoring mechanism, etc. in any such form, style and manner as may be prescribed by the Board in this behalf;
(3) Such tax stamps, banderols, stickers, labels, barcodes, production monitoring equipment etc., shall be acquired by the registered person referred to in sub-section (2) from a licensee appointed by the Board.”; and
(b) after the omitted sub-section (5), the following new subsection shall be added, namely:-
“(6) Any taxable goods in respect of which monitoring, tracking or identification has been prescribed under this Act or rules made thereunder, which are manufactured, produced, removed, transported, supplied or otherwise dealt with or without affixing the prescribed tax stamps, banderoles, stickers, labels, barcodes or without compliance with the prescribed monitoring system, shall be liable to seizure and confiscation in the prescribed manner, along with the conveyance used for the movement, carriage or transportation of such goods.”; after section 40E, the following new section shall be inserted, namely:-
Sale of confiscated goods by auction.- (1) Where any goods liable to confiscation under any provision of this Act have been confiscated, these goods, without prejudice to other action specified against such goods, shall be sold by public auction.
(2) The goods may be sold under sub-section (1) through electronic means, as prescribed by the Board.
(3) For the purpose of sub-sections (1) and (2) of this section, the Board shall be bound by Public Procurement Regulatory Authority Rules, 2014.
(4) The sale proceeds shall be applied to the following purposes in their respective order, namely:-
(a) first to pay the expenses of the sale;
(b) then to pay the sales tax, other taxes and dues including penalty and surcharge payable to the Federal Government in respect of such goods; and
(c) the balance in respect of confiscated goods excluding those liable for outright confiscation, if any, shall be paid to the owner of the goods, provided he applies for it within six months of the sale of the goods failing which the balance amount shall be deposited into government treasury:
Provided that, in case wherein goods declaration has been filed, the share of importer in sale proceeds shall not exceed the declared value of the goods.”;
(15) after section 45B, the following new section shall be inserted, namely:-
“45C. Faceless appeals. - (1) Notwithstanding anything contained in this Act, any appeal filed under section 45B of this Act may be processed through the National faceless center as may be prescribed by the Board.
(2) The provisions of section 45B of this Act, shall apply to faceless appeals accordingly.
(16) after section 47A, the following new sections shall be inserted, namely: -
“47AA. Algorithmic settlement mechanism.- (1)
Notwithstanding anything contained in this Act, the Board may establish digitally operated algorithmic settlement mechanism (hereinafter referred to as “the mechanism”) for settlement of tax proceedings at any stage before any order under sections 11D or 11E of the Act.
(2) In case, the mechanism calculates and presents to the registered person a settlement offer as per the criteria provided under sub-section (3), the registered person may avail the offer as provided in sub-section (4).
(3) The system generated settlement offer shall be calculated on the basis including but not limited to:
(a) the stage of proceedings at which settlement is offered;
(b) the registered person’s compliance history, as maintained in FBR’s data;
(c) the nature and character of the discrepancy; and
(d) any other basis the Board may consider relevant.
(4) A registered person who opts to avail this mechanism shall within ten days from the date of settlement offer to accept the settlement offer on IRIS and deposit the settlement offer amount.
(5) The issues confronted to the registered person, if any, through a notice or an audit report under this Act shall stand abated if the registered person deposits the settlement amount as provided in sub-section (4).
(6) Payment of tax consequent upon acceptance of offer under sub-section (4) of this section shall not preclude proceedings in respect of any other issue or discrepancy not covered by the settlement offer, nor shall it affect proceedings for any other tax period.
“47AAA. Independent case scrutiny committee. - (1) A reference under section 47 before the High Court, or an appeal or review before the Federal Constitutional Court or the Supreme Court of Pakistan, as the case may be, shall only be filed by the Commissioner Inland Revenue after the same has been approved by an independent case scrutiny committee as constituted by the Board.
(2) The Board may constitute one or more such committees and assigned them cases or classes of cases decided by the Appellate Tribunal Inland Revenue or the High Court as the case may be.
(3) The Committee shall comprise of the following Members as nominated by the Board -
(a) a retired judge of Supreme Court of Pakistan, the Federal Constitutional Court, or any of the High Courts of Pakistan who shall also act as Chairman of the Committee;
(b) an Advocate having not less than fifteen years of experience in tax and commercial litigation before the High Court or Supreme Court of Pakistan, to be nominated from a panel notified by the Board from time to time; and
(c) a senior serving or retired officer of the FBR (BS 20 or above).
(4) The powers, functions, and procedure of the Committee along with remuneration of its Members shall be governed as prescribed.
(5) Recommendations of the committee shall be binding upon the Commissioner Inland Revenue having jurisdiction over the case.
(6) Notwithstanding anything contained in any other law for the time being in force, no suit, prosecution, or other legal proceedings shall lie against the Members of the Committee and the Commissioner Inland Revenue having jurisdiction over the case, in relation to the decisions made under this section.;
(7) The Committee constituted under this sub-section shall exercise its powers and functions with effect from the date of its constitution as notified by the Board.”;
(17) in section 56B, after sub-section (2), the following new subsection shall be added, namely:-
“(3) Notwithstanding anything contained in sub-section (1), the Board shall have the power to share data contained in Sales Tax returns of registered persons belonging to a sector amongst all registered persons of the same sector under strict non-disclosure agreements to create market equity and to enhance tax compliance subject to such limitations, restrictions and conditions as may be specified by the Board.”;
(18) in the Third Schedule, in the Table, in column (1), after Serial No. 55, the following new Serial Nos. and entries relating thereto in columns (2) and (3) shall be added, namely:—
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“56. Vegetable and animal fats and Respective
oils, sold in retail packing. headings
Sugar Confectionary, sold in retail packing. Respective
headings
Pasta, whether or not cooked or stuffed (with meat
or other substances) or otherwise prepared,
such as spaghetti, macaroni, noodles, lasagne, 19.02
gnocchi, ravioli, cannelloni; couscous, whether
or not prepared, sold in retail packing.
Sauces, ketchup and other preparations
therefor; mixed condiments and mixed
seasonings; mustard flour and meal and
prepared mustard, sold in retail packing. Respective
headings
Fermented beverages, sold in retail packing. Respective
headings
60 Petroleum jelly, paraffin wax,
micro-crystalline petroleum wax, slack wax,
ozokerite, lignite wax, peat wax, other mineral 27.12
waxes, and similar products obtained
by synthesis or by other processes, whether or
not coloured, sold in retail packing.
Insecticides, rodenticides, fungicides,
herbicides, anti- sprouting products
and plant- growth regulators, disinfectants
and similar products, put up in forms or
packings for retail sale or as preparations
or articles put up in forms or packings for retail sale. 38.08
Plates, sheets, film, foil, tape, strip
and other flat shapes, of plastics, whether
or not in rolls, sold in retail packing. 39.19,
39.20,39.21
63 Tableware, kitchenware, plastic furniture,
storage items, hygienic or toilet articles, and
allied other household articles of plastics,
sold in retail packing. Chapter 39
Trunks, suit- cases, vanity- cases,
executive- cases, briefcases, school satchels,
spectacle cases, binocular cases, camera
cases, musical instrument cases, gun cases,
holsters and similar containers; travelling- bags,
insulated food or beverages bags, toilet bags,
rucksacks, handbags, shopping- bags, wallets,
purses, map- cases, cigarette- cases, 42.02
tobacco- pouches, tool bags, sports bags,
bottle- cases, jewellery boxes, powder- boxes,
cutlery cases and similar containers, of leather
or of composition leather, of sheeting of
plastics, of textile materials, of vulcanised
fibre or of paperboard, or wholly or
mainly covered with such materials or
with paper, put up for retail sale.
Footwear (all types) Respective
headings
Bathroom accessories and bath items,
sanitaryware including taps, showerheads,
fittings, mixers, valves and other washroom
accessories and fixtures, sold in retail packing Respective
headings
Crockery Items, sold in retail packing Respective
headings
Car and automobile accessories, sold in retail packing Respective
headings
Milk, fat filled milk, preparations suitable
for infants, and other products of milk,
sold in retail packing Respective
headings
Preparations for use on the hair, sold in retail packing 33.05
71 Pre- shave, shaving or after- shave
preparations, personal deodorants, bath
preparations, depilatories and other perfumery,
cosmetic or toilet preparations, not elsewhere
specified or included; prepared room
deodorisers, whether or not perfumed or
having disinfectant properties, sold in retail packing 33.07
Toilet or facial tissue stock, towel or napkin
stock and similar paper of a kind used
for household or sanitary purposes, cellulose
wadding and webs of cellulose fibres,
whether or not creped, crinkled, embossed,
perforated, surface- coloured, surface-decorated
or printed, in rolls or sheets, put up for retail sale. 4803.0000, 48.18
Jams, fruit jellies, marmalades, fruit or
nut puree and fruit or nut pastes, obtained
by cooking, whether or not containing
added sugar or other sweetening matter,
other fruit and vegetable preparations, sold in
retail packing 20.07, 20.08
Household utensils, including Stainless steel,
aluminum, melamine and other utensils
and tableware. Respective
headings
Ceramic Products including wash basins,
commodes, tiles and allied ceramic 69.10”;
sanitary products, put up for retail sale.
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Note: Where the Federal Government has notified that the sales tax shall be charged, levied and paid at a rate higher than eighteen percent, the same rate shall continue to be charged, levied and paid after their inclusion under the Third Schedule.
Copyright Business Recorder, 2026
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