Islamabad, Apr 18, 2025: The Federal Board of Revenue (FBR) has announced that individuals registered for sales tax who apply for de-registration will no longer be eligible for input tax refunds or adjustments.
This move comes as part of a recent update to the Sales Tax Rules, 2006, introduced through SRO.608(I)/2025.
According to the new regulation, once a de-registration request is submitted online, the applicant will be blocked from submitting Annex-C, Annex-D, and their tax return.
Moreover, during the de-registration process, the individual will not qualify for any tax refund or input adjustment.
Additionally, other registered businesses will also be denied any input tax benefits on invoices issued by the applicant during this period.
The FBR has reinforced that the Inland Revenue Commissioner holds the authority to launch an audit or investigation if there is a need to assess the tax responsibilities of the applicant.
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The authority will formally notify the applicant in writing and require them to present all necessary documents and records for review.
Once the applicant submits the required documentation, and if the Commissioner carries out an audit or investigation following the de-registration application, the Commissioner must finalize all related procedures within a 90-day window.
If this process identifies any tax dues, the applicant must settle them by submitting a final return under Section 28 of the Sales Tax Act.
Upon completion of the final return and payment of any pending dues, the system will automatically update the applicant’s status.
The computerized portal will officially confirm the de-registration after the 90-day timeframe has elapsed.
This new development highlights FBR’s firm stance on tax compliance and documentation integrity.
Businesses must now carefully plan their exit from the sales tax registration system and ensure they meet all obligations before de-registration.
