Got an advance intimation in IRIS? How FBR’s new e-scrutiny works

Answer first. SRO 1655(I)/2026, dated 25 September 2026, adds a Chapter XII-A to the Sales Tax Rules for electronic scrutiny. FBR’s system cross-matches your returns with other data it holds and, where it finds a mistake or discrepancy, sends an online advice or advance intimation through IRIS. You get at least seven days to clarify, correct or take other action. If you do not respond, a reminder follows with at least seven more days. After that, the record goes to your Inland Revenue officer, who decides what to do. An advance intimation is a chance to fix things before legal or penal action starts, so treat it as urgent but not as a penalty.

What SRO 1655 does

The new chapter applies to the automated scrutiny, analysis and cross-matching of sales tax returns and other data through the computerized system FBR runs under section 50B of the Sales Tax Act. In plain words:

• The system looks for problems. It compares what you declared with other data FBR holds.
• It tells you first. Issues are sent as an online advice or an advance intimation through IRIS. The rule says the aim is to let you clarify, correct errors or take other action before any legal or penal action begins.
• An officer can send the same notice. The officer with jurisdiction over you can also send the system-generated intimation.
• Everything is recorded. The issues found, the notices sent and your responses go to your officer and onto a dashboard in FBR’s system.
• The officer decides the next step. After looking at your response, the officer takes action under the Act if it is needed.

The timeline, step by step

Seven days is short when the notice lands in an inbox nobody checks, or during month end. The minimum is a floor, so read the period stated in the notice itself.

What may trigger one

SRO 1655 does not list the checks the system runs. Looking at what FBR’s system already holds and what the 2026 rules made it care about, these mismatches are likely candidates. Treat the list as our reading, not as FBR’s.

• Invoices FBR has that your return does not. An e-invoice with an FBR number that is missing from Annexure-C. Since SRO 1666(I)/2026, the tax on such an invoice can be recovered unless it was lawfully cancelled.
• Input tax with no matching supplier sale. Input tax you claimed that your supplier did not declare as output tax. The Finance Act 2026 added a 20% penalty for unmatched input tax, confirmed after notice.
• Purchases from a listed fake-invoice issuer. Input tax on invoices from a supplier placed on the Simulated Invoice Issuers Register, which has to be reversed within 60 days.
• Sales without e-invoices. Declared sales that do not match the e-invoices on record.
• Arithmetic and treatment errors. Rates, exemptions or totals that do not add up.

How to respond

1. Read it the day it arrives. Note the deadline in the notice, not the seven-day minimum.
2. Find the transactions. Identify exactly which invoices, periods and amounts the notice is about. Your e-invoicing records help here: the FBR invoice number, the payload sent and FBR’s reply for each invoice.
3. Decide which kind of issue it is. A misunderstanding you can explain, an error you need to correct, or a problem caused by a supplier or customer.
4. Take advice before correcting a return. If the fix means revising a return or reversing input tax, ask your tax adviser about the right route and its effect.
5. Respond in IRIS, inside the period. Give a clear explanation and attach the evidence. A short, specific answer with invoice numbers is better than a long general one.
6. Fix the cause. If the same mismatch could happen next month, change the process that produced it.

Do not ignore a notice because you think it is wrong. Explaining why it is wrong, with evidence, is a response. Silence sends the record to your officer without your side of it.

Who should watch IRIS

An advance intimation only helps if someone sees it in time. Name an owner and a backup for the IRIS inbox, the same way you would for the bank account. For a CA firm, that means someone in the firm watching each client’s IRIS, not only the client. Our post on who should own IRIS credentials covers access, and our CA firm playbook covers running this across many clients.

The wider picture

E-scrutiny is one part of a broader move to handle sales tax digitally. The Finance Act 2026 also:

• created a National Faceless Center, so that audits, assessments and appeals can be handled electronically, with hearings held online and the officer’s identity kept confidential;
• gave FBR power to set up an algorithmic settlement mechanism, which would offer a settlement amount through IRIS that a registered person can accept within ten days, closing the issues raised;
• required an audit report at the end of an audit, after your explanation has been taken.

These are powers in the Act. How and when each one is used depends on what FBR sets up and notifies.

If your registration is suspended

Section 21(2) of the Sales Tax Act, as amended by the Finance Act 2026, lets the Commissioner suspend the registration of a person who fails to integrate with FBR’s e-invoicing system or to install a production monitoring system. Business Recorder reported on 25 September 2026 that FBR had started suspending registrations for non-integration. We have not seen an FBR document announcing it.

If it happens, contact your tax adviser the same day, and move your integration forward as fast as you can. Our catch-up plan sets out the order.

Fewer intimations in the first place

Most of the mismatches above are caught by routine checks that take minutes when done regularly:

• Compare your sales register with FBR’s record of your e-invoices before every return.
• Cancel wrong or duplicate invoices inside the 72-hour window, so they do not sit in FBR’s record as sales.
• Compare the purchases your suppliers declared against your NTN with your purchase book each month, and chase gaps before you claim the input tax.
• Check new suppliers are registered and active before you pay them.
• Fix rejected invoices the same day.

FAQs

What is an advance intimation from FBR? A notice sent through IRIS, under SRO 1655(I)/2026, pointing out a factual or legal mistake or discrepancy that FBR’s system found in your sales tax data. It gives you a chance to clarify or correct before any legal or penal action.

How long do I have to respond? The period stated in the notice, which must be at least seven days. If you do not respond, a reminder is sent with at least seven more days.

What happens if I ignore it? After the reminder period, the record of the issue and the lack of response goes to your Inland Revenue officer, who decides what action to take under the Sales Tax Act.

Is an advance intimation a penalty? No. It is a notice of a possible issue. Penalties, if any, come later through the normal process. Responding well is the best way to stop it getting that far.

Can a CA firm respond for a client? A firm acting for a client with the right authority can help prepare and submit the response. Someone in the firm should be watching each client’s IRIS so notices are not missed.

Related reading: the Finance Act 2026 penalties, what to store once FBR answers and IRIS registration.