If you’re an entrepreneur starting or running a business in Pakistan, the one term you’ll come across quickly is GST. Goods and Services Tax (GST) previously called General Sales Tax in Pakistan is something you must understand if you’re a business owner or an accountant because it has a direct impact on your pricing, cash flow, compliance and profits.
In this ultimate guide, we would go through everything a business owner in the country must know about GST in Pakistan from what does it stand for to registration, rates, filing and some of the practical tips.
What is GST in Pakistan?
GST is an abbreviation for Goods and Services Tax. In Pakistan, it is known as Sales Tax and is being regulated by the Sales Tax Act, 1990. But in all practical terms as well as on the FBR website, it is called GST.
In simple terms, GST in Pakistan is an indirect value added tax which is imposed on supply of goods and services every time the transaction took place up to the level when it reaches the ultimate consumer and a credit can be taken for any input tax paid.
Present Standard GST Rate (2025): 18% on almost all product supplies (some goods are zero-rated, whereas others attract lower rates like 0%, 5%, 10%, or the maximum rate of up to 25%).
Types of GST
Pakistan essentially follows a single GST system, but it is divided based on jurisdiction and nature of supply:
| Type | Authority | Applicability | Rate |
| Federal GST | Federal Board of Revenue (FBR) | Goods + Services (except those under provinces) | 18% (standard) |
| Provincial Sales Tax on Services | Punjab (PRA), Sindh (SRB), Khyber Pakhtunkhwa (KPRA), Balochistan (BRA) | Services only (varies by province) | 13–16% (mostly 15–16%) |
| GST on Goods | FBR | All taxable goods imported or supplied in Pakistan | 18% (standard) |
| Zero-Rated Supplies | FBR | Exports, certain food items, medicines, etc. | 0% |
| Exempt Supplies | FBR / Provincial | Certain essential items and services | Nil |
Who Needs GST Registration in Pakistan?
You need to get Sales Tax Registration (commonly known as GST Registration in Pakistan) if:
- Your annual taxable turnover is equal to or more than PKR 100 million (for manufacturer) or in other cases, there is no threshold prescribed.
- You’re an importer, exporter, distributor, reseller or dealer
- You have made supplies that would be zero-rated (exports)
- You voluntarily want to claim input tax adjustment.
Even if your turnover is under the threshold, you should strongly consider registering if you wish to get back the GST that you pay on purchases (input tax credit).
Step-by-Step Registration Process
1st step: Go to FBR GST Portal:http://iris.fbr.gov.pk
2nd step: Click on “Registration” then “New Registration (Form STR-1)”
3rd step: Fill in:
- CNIC / NTN
- Business details
- Bank account (IBAN)
- Photos of premises and details of rent agreement/ownership proof
- Utility bills
4th step: Submit the application.
5th step: Biometric verification to be available at the nearest FBR office or NADRA e-Sahulat franchise.
6th step:Get GST Registration Certificate (Normally in 2–7 Days)
7th step: Once registered, you will be provided with a Sales Tax Registration Number (STRN) which should be shown on all invoices.
Key GST Compliance Requirements
Upon registration, the businesses are subject to the following:
Monthly GST Returns
Lodge on IRIS monthly sales tax returns stating:
Tax Paid on Purchases (GST paid)
GST payable (Sales GST)
Net payable tax (if any)
Issuing Sales Tax Invoices
All supplies subject to sales tax must be supported by a valid FBR-compatible invoice which indicates the GST charged.
Proper Bookkeeping
For the purpose of audit and compliance, such records on purchases of sales input tax and output tax need to be accurate.
Timely GST Payments
If filed late or payment is not received on time, it could lead to fines, interest fees, and an audit.
CBM Consultants in Action:
CBM Consultants assist businesses with their GST by making sure all regulations are met; returns are filed correctly and documented properly. We deal with GST registration, file monthly returns and records, calculate input/output tax amounts, do bookkeeping as per compliance. Our experts also advise businesses on GST regulations, provincial exceptions and audit necessities for less risky penalties and efficient structuring of tax operations.
Common GST Mistakes
- Not displaying STRN on invoices (penalty up to PKR 50,000)
- Issuing fake or flying invoices
- Not claiming legitimate input tax
- Mixing personal and business expenses (input withheld)
- Non or delayed filing of returns
GST Checklist for Businesses
- Once you commence taxable supplies, take your GST registration at once
- Issue proper tax invoices displaying STRN, description value, and GST amount separately.
- Retain full records of purchases and sales for 6 years minimum.
- Reconcile input tax every month.
- Monthly GST returns filing on or before the 15th (monthly) of next month.
- Monitor budget changes (reviewed annually with possible rate changes every June).
Conclusion
It is fundamental to know the GST in Pakistan for each business whether it is small or large. Right from its full form to how to register on the GST portal, to be compliant is to run a business without hassles and needless expenses. Amid the constant changes in tax laws, keeping track of and being updated are essential to avoid penalties or making the most input tax benefits.