ISLAMABAD: The Federal Board of Revenue (FBR) Monday clarified that movement of goods from a factory to the registered person’s own warehouse under the same Sales Tax Registration Number (STRN) will not be treated as a taxable supply and will not require issuance of a digital invoice.
The FBR has taken this major facilitation measure for the
businesses having multiple premises through issuance of a notification on Monday.
The FBR through sales tax general order (STGO) No. 25 of 2026 has clarified the treatment of goods moved between the factory and own warehouse of the same registered person under the same Sales Tax Registration Number (STRN).
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An inter-premises movement of goods from a factory to the registered person’s own warehouse, held under the same Sales Tax Registration Number (STRN), does not constitute a “supply” and therefore does not attract the obligation to issue a digital/e invoice. Such movement must nonetheless be evidenced by a prescribed non-fiscal Stock Transfer Note, as set out at Annexure-A, to preclude its mis-characterisation as an undocumented supply during transit checks or audit, FBR added.
The issue was specifically taken up by the Karachi Chamber of Commerce & Industry (KCCI) with the Chairman FBR during their recent meeting held at Karachi Large Taxpayer Office (LTO).
Under the clarification, movement of goods between premises operating under the same STRN does not constitute a taxable supply, as there is no transfer of ownership or consideration. Accordingly, no digital/ e-invoice or output tax is required.
The FBR has; however, prescribed a Stock Transfer Note (STN) for such movements. The STN must accompany the goods during transit and clearly state “Stock Transfer — Not a Taxable Supply.” Appropriate entries are also required to be maintained in the factory and warehouse stock records.
Where the receiving premises have a separate STRN, the movement will constitute a taxable supply and must be supported by a digital tax invoice, with output tax accounted for in the normal manner. Importantly, the FBR has directed field formations not to treat a properly documented same-STRN stock transfer as an undocumented supply.
Officers have also been instructed not to demand the driver’s CNIC or documents other than the applicable digital invoice or STN and, subject to the specific exception for Third Schedule goods, not to physically check, examine or unload goods merely because a digital invoice is not available.
The clarification provides an important facilitation for businesses having multiple premises under a single STRN, while ensuring that internal stock movements remain properly documented and distinguishable from taxable supplies.
The FBR explained that under Section 2(33) of the Sales Tax Act, 1990, a supply requires a sale or other transfer of the right to dispose of goods as owner. Since movement between a factory and the warehouse of the same registered person involves neither a change of ownership nor consideration, it does not constitute a supply and therefore does not attract the charge under Section 3 of the Act.
Consequently, the requirement under Section 23 to issue a tax invoice does not arise, while the digital invoicing provisions under Chapter XIV of the Sales Tax Rules, 2006 are also not applicable to such movement.
The FBR; however, clarified that the position will be different where the receiving warehouse has a separate STRN.
In such a case, the movement will be treated as a taxable supply between two distinct registered persons, making digital invoicing mandatory and requiring payment of output tax in the normal manner.
Copyright Business Recorder, 2026