What do you have to file every month?
A registered person files one sales tax return for every month. The return compares the sales tax you charged customers (output tax) with the sales tax you paid on business purchases (input tax). If output is higher, you pay the difference. If input is higher, the extra is usually carried forward to the next month.
The return comes with annexures. Annex-C lists your sales, and it is the part people get wrong most often, because every line has to match a real invoice and the buyer's NTN or STRN.
What are the sales tax return due dates?
Practitioner guides describe three steps each month: Annex-C by the 10th, tax payment by the 15th and the return itself by the 18th of the following month. Some sites quote one single date, and FBR can change the schedule by notification. So treat the date shown in your IRIS account for that month as the real one.
For the other FBR dates through the year, see the FBR tax deadlines calendar.
How do you file a sales tax return on IRIS?
- Gather the month's sales and purchase invoices, with the NTN or STRN of every buyer and supplier.
- Log in to IRIS with your NTN and open the sales tax return for that month.
- Upload Annex-C and check it against your invoices before you go further.
- Look at output tax against input tax. The return works out the difference.
- Generate the payment slip, pay through a bank or a mobile banking app, and keep the confirmation.
- Submit the return and save the acknowledgment.
Menu names on IRIS change now and then. If your screen looks different, follow what it shows for the month and keep your acknowledgment either way. If you have lost your login, start with FBR IRIS login help.
A simple example with numbers
Say you sold goods worth Rs 1,000,000 before tax. At the standard 18% rate you charged Rs 180,000 sales tax. In the same month you bought stock worth Rs 600,000 before tax and paid Rs 108,000 sales tax on it. You pay FBR Rs 72,000, which is 180,000 minus 108,000.
Now say your purchases had carried Rs 200,000 sales tax instead. You would owe nothing that month and carry Rs 20,000 forward. Some goods have different rates, so check the rate for what you actually sell.
What if you had no sales this month?
File a nil return. Skipping a quiet month can still count as a default, and it is the easiest mistake to avoid. A nil return takes a few minutes once your account is set up, so put a reminder in your phone for the first week of every month.
What goes wrong most often?
- Annex-C does not match your invoices, so the return is held or later questioned.
- A buyer's NTN or STRN is wrong or missing.
- The return is submitted but the tax is never paid.
- Input tax is claimed on an invoice from a supplier who is not an active registered person, which FBR can refuse.
- A service business files only with FBR and forgets the provincial authority. Services are taxed by the province, see PRA, SRB, KPRA and BRA registration.
What happens if you file late?
Late filing can bring a penalty and a default surcharge on unpaid tax, and repeated defaults lead to notices. The amounts come from the Sales Tax Act and are revised, so we do not print a figure that may be out of date. If you have missed months, file the oldest one first. If FBR has already written to you, read how to reply to an FBR notice before you do anything else.