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The FBR is all set to adopt the system of E-Invoicing for Fast Moving Consumer Goods (FMCGs) to digitize their sales tax invoices through a dedicated system. According to FBR’s notification 1525(I)/2023, this measure falls under rule 150Q of Chapter XIV of the Sales Tax Rules 2006.
The purpose of E-Invoicing is to meet the shortfall of revenue tax and help with tax collection as well as digitization of the economy. In this regard, FBR has issued a technical document to guide Supply Chain Operators (SCOs) on the digital invoice data-sharing process.
The directive, set to take effect on February 1, 2024, applies to importers, manufacturers, wholesalers, dealers, distributors, and wholesaler-cum-retailers involved in the FMCG sector.
This document outlines the requirements for adapting IT systems to generate and share sale and purchase invoices through a designated Application Programming Interface (API), ensuring data capture for sales, purchase invoices, debit notes, and credit notes. Registration for this system will be conducted via the E-FBR portal, where SCOs are required to submit the necessary data.
Upon successful data submission, the FBR will issue a Point of Sale (POS) registration number, which will be essential for compiling invoices in the prescribed format. The regulation stipulates that all registered entities must electronically transmit sales tax invoices. However, the FBR has provisioned for application for extension in compliance time to be submitted to the Commissioner of Inland Revenue, should there be a plausible cause. This move is part of FBR’s broader efforts to digitize tax collection processes, aiming to ensure a more streamlined, efficient, and transparent system that caters to the dynamic demands of the FMCG sector, excluding durable goods from its ambit. FMCG products are classified in the Third Schedule to the Sales Tax Act (such as juices, aerated beverages, soaps, tea). This initiative would be effective in preventing tax avoidance and broadening the tax base.
Reference/ Citation
https://download1.fbr.gov.pk/SROs/2023111015115239175SRO1525-2023.pdf
