Tax collection is very important to run the economy of the country that’s why every business needs to have a sales tax registration number. You cannot file a sales tax return if you don’t have a sales tax registration certificate. You can register the sales tax number with the FBR (Federal Board of Revenue). After the registration, you will get a sales tax number and user ID and password through which you will be able to login to the online e-file system where you can submit your sales tax return.
Keep on reading to know how you can apply for sales tax registration number in Pakistan but before that let’s discuss what STRN is and who is accountable to pay sales tax.
What is STRN?
STRN stands for sales tax registration number in Pakistan. Sales tax is defined as the tax paid to the government for the sale and provision of certain services and goods. The Pakistani government imposes sales tax under the 1990 Sales Tax Act for goods or services that are sold and delivered, and also on the goods that are imported into Pakistan.
Who is Accountable to Pay Sales Tax?
According to section 25 of the Sales Tax Act 1990, the sales tax liabilities can only be assessed by tax authorities for registered taxpayers. So, all imported and manufactured local products, except medicines, computer software, indefinite agricultural products, poultry products, and other products listed in the Sales Tax Act of 1990, are subject to sales tax.
The businesses that are required to get sales tax registration and are accountable to charge sales tax to the customers on their goods or services are given below.
- All importers.
- All wholesalers including distributors and dealers.
- Manufacturers excluding the ones that fall in the cottage industry (Cottage industry that has less than Rs. 10 million yearly turnover and whose yearly utility bill (Telephone, Gas, and Electricity) does not exceed Rs. 800,000.
- Service providers like customs agents, hotels, courier services, caterers, etc.
- The person who is required to register for the sales tax but still not registered needs to be registered by the tax department after the inquiry under the sub-rule 1 of rule 6 of Sales tax rules, 2006.
Information and Documents required for Sales Tax Registration Number
You can register for sales tax if you have active Iris portal credentials, and you can get this with the help of your NTN number. Login to your Iris portal and select the Form 14(1) (Form of Registration filed voluntarily through Simplified) (Sales Tax) from the drop down menu of registration.
After the selection of Form 14(1), you will be required to provide the following information.
- Tax Period
- Sales Tax Information, in case of individual type either Manufacturer or Non-Manufacturer.
- In the case of AOP or Company, CNIC of all the Members, Principal Officer, and Director with the type of registration whether it is Manufacturer or Non-Manufacturer.
- Business details which include the Business name, acquisition date, business activity, business address, and the capacity.
- Bank account details which include the Bank Account Maintenance Certificate along with the IBAN issued by the bank.
- Consumer number of the Gas and Electricity suppliers along with the pictures of utilities bill and meter.
- GPS tagged pictures of the business premises.
- If you are a Manufacturer, then provide the GPS tagged pictures of the machinery and industrial gas or electricity bill and meter.
After submission of the above mentioned information and documentation, the system will register you for the Sales tax number.
After providing all the information and documentation on the Iris Portal you need to visit the e-Sahulat center of NADRA within 30 days for biometric verification. If you fail to visit the center for biometric verification your registration will be canceled.
In case you are a manufacturer, the authorities may need post verification of all the information and document provided through the field office. If they found that any of the provided documents or information is fake, wrong or missing, they may request through the system to provide the missing or correct document within 15 days. Failing to do so will result in the registration cancelation.
Sales tax registration number for any business is important to avoid penalties in Pakistan. It is good to pay the tax to the government for your benefits. Tax strengthens and balance the economy of the country.