Introduction

GST registration Pakistan (GST) is an indirect tax levied on the supply of goods and services. In Pakistan, it is commonly referred to as Sales Tax, which is administered by the Federal Board of Revenue (FBR). GST registration is mandatory for businesses that meet the prescribed threshold of turnover or deal in taxable goods and services. This article provides a step-by-step guide on GST registration in Pakistan, its requirements, benefits, and compliance obligations.

Understanding GST in Pakistan

What is GST?

GST, or General Sales Tax, is a value-added tax (VAT) applied to the sale of goods and services at various stages of the supply chain. The end consumer bears the tax burden, while businesses act as intermediaries to collect and deposit it to the government.

Governing Authority

The Federal Board of Revenue (FBR) is responsible for the implementation and regulation of GST in Pakistan. The tax rate for most goods and services is 17%, although some sectors may have different rates.

Who Needs to Register for GST in Pakistan?

Businesses and individuals engaged in taxable activities must register for GST if they meet any of the following criteria:

1. Annual Turnover Threshold: If a business has a turnover exceeding Rs. 10 million annually, it must register for GST.


2. Manufacturers and Importers: All manufacturers and importers are required to register for GST, irrespective of their turnover.


3. Retailers and Wholesalers: Large retailers and wholesalers involved in taxable supplies need to obtain GST registration.


4. Service Providers: Certain service providers, such as restaurants, hotels, and construction firms, must also register under GST.


5. Voluntary Registration: Businesses can opt for voluntary registration to avail of input tax adjustments and business credibility.

Steps for GST Registration in Pakistan

1. Prepare Required Documents

Before initiating the registration process, ensure that the following documents are available:

• CNIC of the Proprietor/Partners/Directors


• Business Bank Account Details


• Electricity and Gas Bills of Business Premises


• Rental Agreement or Ownership Proof of Business Location


• Company Incorporation Certificate (if applicable)


• NTN (National Tax Number)

2. Online Registration through IRIS Portal

FBR provides an online platform, IRIS, for GST registration. Follow these steps:

1. Visit the FBR IRIS Portal (https://iris.fbr.gov.pk/)


2. Log in using your credentials or create a new account.


3. Select Sales Tax Registration from the dashboard.


4. Fill in the required details about your business.


5. Upload scanned copies of the required documents.


6. Submit the application for verification.

3. Verification and Issuance of Registration Certificate

• FBR will review the submitted details and documents.


• A site inspection may be conducted to verify the physical presence of the business.


• Once approved, the business will receive a Sales Tax Registration Number (STRN).

Benefits of GST Registration

1. Legal Compliance and Credibility

Registering for GST ensures that the business operates legally and gains credibility in the market.

2. Input Tax Adjustment

Businesses can claim input tax on purchases, reducing their overall tax burden.

3. Avoidance of Penalties

Failure to register for GST can result in heavy fines and legal action by FBR.

4. Expansion Opportunities

A GST-registered business can engage with large clients, government contracts, and exports.

GST Return Filing and Compliance

Monthly Filing Requirement

Registered businesses must file monthly GST returns through the IRIS portal by the 18th of every month.

Tax Payment

The collected GST must be deposited into the government treasury before filing the return.

Record Keeping

Businesses must maintain proper records of invoices, purchases, and sales for at least six years for audit purposes.

Conclusion

GST registration in Pakistan is essential for businesses involved in taxable goods and services. It not only ensures legal compliance but also provides financial and operational benefits. By following the registration process and meeting tax obligations, businesses can avoid legal issues and enhance their credibility in the market.

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