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The Federal Board of Revenue (FBR) has begun enforcing its e-invoicing penalty system from September 1, 2025, with fines starting at Rs500,000 for non-compliance. The FBR e-invoicing penalty primarily targets importers, public companies, and businesses with an annual turnover exceeding Rs1 billion over the last twelve sales tax returns.
According to Section 25A of the Sales Tax Act, 1990, FBR field formations can now issue penalties to sales tax-registered persons who have failed to integrate their invoicing systems. Repeat offenders may face the FBR e-invoicing penalty rising to Rs1 million, Rs2 million, and even Rs3 million depending on the severity of non-compliance.
Any sales tax invoices issued outside the prescribed digital invoicing framework will be considered illegal. Purchasers of such invoices will not be allowed input adjustments, impacting their compliance and tax credits.
While large enterprises and public companies are expected to comply with SRO 1413(I)/2025, small, medium, and seasonal importers may face challenges in immediate integration. Experts have urged the FBR to consider extending the deadline in light of widespread flooding affecting businesses nationwide.
At the same time, tax specialists have advised registered taxpayers to promptly adopt the electronic system to avoid penalties and to support the government’s efforts to eliminate unregistered or “flying” invoices.
