GST registration is mandatory for qualifying Pakistani businesses. Understanding the process, requirements, and compliance obligations helps you stay on the right side of FBR regulations while taking advantage of input tax credits.

What is GST in Pakistan?

General Sales Tax (GST) in Pakistan is a consumption tax applied to goods and services. Understanding the basics of GST is essential before diving into registration.

Key Points

Standard rate: 18% (may vary for specific items)
Administered by: Federal Board of Revenue (FBR)
Registration threshold: PKR 50 million annual turnover
Voluntary registration: Available for smaller businesses

Who Must Register for GST?

Mandatory Registration

You MUST register if:

Annual turnover exceeds PKR 50 million
You’re an importer of goods
You’re a manufacturer or producer
You supply goods to registered businesses regularly
You’re a wholesaler or distributor above threshold

Voluntary Registration

Even below the threshold, you may want to register if:

Your customers (businesses) require GST invoices
You want to claim input tax credits on purchases
You plan to scale and want established compliance
You deal with other registered businesses

Exempt Businesses

Some businesses are exempt from GST:

Basic food items suppliers
Agricultural producers (certain categories)
Educational institutions
Healthcare providers (most services)
Specific items listed in Fifth Schedule of Sales Tax Act

Benefits of GST Registration

1. Input Tax Credit

Claim back GST paid on business purchases:

Inventory purchases
Equipment and machinery
Office supplies and utilities
Professional services

This significantly reduces your effective tax burden.

2. Business Credibility

GST registration signals:

Legitimate, established business
Proper record-keeping
Compliance with regulations
Ability to provide tax invoices

3. Access to Larger Customers

Many corporate and government buyers only deal with registered suppliers who can provide proper GST invoices.

Documents Required for Registration

For Individuals/Sole Proprietors

CNIC (National ID Card)
NTN (National Tax Number) certificate
Bank account statement
Utility bill (for business address)
Rent agreement (if applicable)
Passport-size photographs

For Companies/Partnerships

Additional requirements:

Company registration certificate (SECP)
Partnership deed (for partnerships)
Directors’/Partners’ CNICs
Board resolution for authorized signatory
Memorandum and Articles of Association

For company formation details, see our business registration guide and SECP compliance requirements.

Step-by-Step Registration Process

Step 1: Get Your NTN

Before GST registration, you need a National Tax Number:

Visit FBR IRIS portal (iris.fbr.gov.pk)
Create an account if new
Apply for NTN registration
Submit required documents
Receive NTN certificate

Step 2: Access IRIS Portal

Login to iris.fbr.gov.pk
Navigate to “Registration” section
Select “Sales Tax Registration”

Step 3: Fill Registration Form

Complete the online form with:

Business details (name, address, nature)
Contact information
Bank account details
Principal place of business
Nature of goods/services supplied
Expected turnover

Step 4: Upload Documents

Scan and upload required documents in specified formats (usually PDF, max size limits apply).

Step 5: Submit Application

Review all information and submit. You’ll receive an acknowledgment with application reference number.

Step 6: Verification

FBR may:

Request additional documents
Conduct physical verification of premises
Ask clarifying questions

Step 7: Receive Registration Certificate

Upon approval:

GST registration number assigned
Certificate available for download
Display certificate at business premises

After Registration: Your Obligations

1. Issue Proper Invoices

Every sale must have a proper GST invoice showing:

Your GST registration number
Buyer’s details (name, NTN if registered)
Item description and quantity
Amount before tax
GST amount separately
Total amount

2. Maintain Records

Keep detailed records of:

All sales and purchases
GST collected (output tax)
GST paid (input tax)
Invoices and receipts
Inventory records

3. File Monthly Returns

Submit monthly GST returns by the 15th of following month:

Report total sales and purchases
Calculate net GST liability
Pay any tax due

4. Pay GST Dues

Net GST payable = Output Tax (collected from customers) – Input Tax (paid on purchases)

Pay through designated bank branches or online banking.

Common Mistakes to Avoid

Wrong address: Ensure registered address matches actual business location
Incomplete documents: Submit all required documents to avoid delays
Missing bank details: Provide active business bank account information
Late returns: File on time to avoid penalties
Poor record-keeping: Use proper accounting software for accurate records

Using Software for GST Compliance

Manual GST management is error-prone and time-consuming. Modern business automation software helps with:

Automatic GST calculation on every invoice
Input tax tracking on purchases
GST-ready reports for easy filing
Proper invoice format with all required fields
Record retention for audit purposes

GST for Different Business Types

Retailers

Retail shops collect GST from customers and pay to FBR after deducting input tax.

Manufacturers

Manufacturing businesses pay GST on raw materials and charge on finished goods.

Distributors

Distribution companies manage GST across multiple transactions daily.

Service Providers

Service tax obligations vary by service type. Consult a tax advisor for specifics.

Frequently Asked Questions

How long does GST registration take?

Online registration typically takes 3-7 working days if all documents are complete and verification is straightforward. Complex cases or incomplete applications take longer.

Is there a fee for GST registration?

GST registration with FBR is free. However, you may incur costs for document preparation, professional assistance, or bank account opening.

Can I register for GST if I’m below the threshold?

Yes, voluntary registration is available. This is beneficial if your customers need GST invoices or if you want to claim input tax credits on significant purchases.

What happens if I don’t register when required?

Operating without required GST registration can result in penalties, back taxes with interest, and potential legal action. FBR increasingly cross-checks data to identify unregistered businesses.

Can I cancel my GST registration?

Yes, you can apply for deregistration if you no longer meet the requirements (e.g., business closure, falling below threshold). Submit a deregistration application through IRIS portal.

Do I need separate registration for multiple locations?

Generally, one registration covers all locations under the same legal entity. However, you must register each branch address as additional place of business.

Related Compliance Requirements

GST registration is part of broader business compliance:

Conclusion

GST registration is a critical step for Pakistani businesses that meet the threshold or want the benefits of formal tax registration. The process is straightforward online, and proper compliance protects your business while enabling input tax credits.

Need help managing GST compliance? Try HysabOne – Pakistan’s accounting software with automatic GST calculation, proper invoice generation, and GST-ready reports for easy filing. Start your free trial today!

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GST Registration in Pakistan: Complete Step-by-Step Guide for Businesses