Late to FBR digital invoicing? A catch-up plan

Answer first. FBR digital invoicing was phased in by SRO 1852(I)/2025, and its last date, for “registered persons other than listed above”, was 31 December 2025. Service providers in Islamabad had their own dates in June 2026 under Sales Tax General Order 05 of 2026. Since 29 September 2026, the same rules also cover federal excise duty. So a business that should be live and is not is now late, and the Finance Act 2026 made that more expensive: higher penalties, the power to suspend or blacklist a registration, and tax recovered on sales without an FBR-numbered invoice. The way out is the normal process, done in a tight order: confirm your position, enrol in IRIS, clean your product and buyer lists, clear the sandbox, and go live before your next return.

Which date applied to you

The dates below are history now. They are worth knowing because they show how long a business has been out of step, which matters if FBR asks.

Turnover here means turnover declared in sales tax returns for the previous twelve months. Our deadlines guide has the full SRO 1852 table, including the registration and testing dates.

We have not found any notification that sets a fresh deadline or grace period for sales tax digital invoicing after these. A business that registers for sales tax now falls into the last category, whose date has passed, so plan to integrate as part of registering. Confirm your own position with your tax adviser.

What being late costs now

The Finance Act 2026, in force from 1 July 2026, and FBR’s September rules changed the picture for businesses that are not integrated.

• A bigger penalty for not integrating. Section 33, serial 25, now provides a penalty of up to Rs 1 million for a person who must integrate and does not do so in the time FBR notified. If the default continues one month after that penalty, a second penalty of up to Rs 5 million follows. Business premises can be sealed with or without a penalty.
• An older penalty that still applies. Serial 25A covers a person required to integrate under section 23 who fails to register or integrate, or fails to issue electronic invoices after integrating. It provides Rs 500,000 for a first default, rising to Rs 3 million for a fourth, and the premises are liable to be sealed. Which of serial 25 and 25A applies to a given default is not settled.
• Suspension and blacklisting. Section 21(2) now covers non-compliance with the integration provisions in section 23(5) and (6). Business Recorder reported on 25 September 2026 that FBR has started suspending registrations for failing to integrate. We have not seen an FBR document announcing it.
• A higher penalty for not issuing invoices. Rs 25,000 or 5% of the tax, whichever is higher, up from Rs 5,000 or 3%.
• Tax worked out on unaccounted sales. Under rule 150XD(2), as substituted by SRO 1666(I)/2026, an officer can compute and recover the tax on sales made without an invoice carrying an FBR number or QR code.
• Input tax at FBR’s discretion. New section 8B lets FBR raise or lower the 90% cap on input tax for a person, based on compliance with digital invoicing, POS or production monitoring.

On the income tax side, the same Act lets 3% of expenses claimed be disallowed for a person who fails to install an electronic resource or act as an integrated enterprise where the law requires it. How that applies to a given business is not settled, so ask your adviser.

This week

The first week is about decisions. The technical work comes after. Everything after depends on them.

1. Confirm your position. Ask your tax adviser which category you fall in, and whether anything about your business changes the picture. Get it in writing.
2. Choose how you will invoice. Screens for a small team, bulk upload for heavy volume from Excel, or an API if your ERP or POS makes the invoices. This decides who does the work in the coming weeks.
3. Enrol in IRIS. Open Digital Invoicing, pick the integration mode, and choose PRAL or another licensed integrator as your connection.
4. Sort out the IP address. A system on your premises needs a static public IP from your internet provider; a cloud system needs a fixed outgoing address. FBR has to whitelist it before anything works. Once you submit it, FBR states a turnaround of up to two working hours.
5. Pick business nature and sector with care. They decide which sandbox scenarios you get, from two to fifteen.

The next stretch

This is where most of the time goes, and almost none of it is the connection to FBR.

• Product list. Every item with its HS code, sale type, unit and rate, taken from FBR’s reference lists. Reduced-rate items need their SRO and serial. Third Schedule items need a retail price.
• Buyer list. Regular customers’ NTN or CNIC checked against FBR. A rule, agreed with your adviser, for unregistered buyers.
• Sandbox. Clear the scenarios FBR assigned, then test your own real invoices, including some that should fail. The production token is issued automatically once your assigned scenarios pass, so your own testing is the only check. Our post on designing your own test cases has a list.
• First live invoices. Have a person check each one for the first days: FBR number back, every line clean, the right tax.

Doing these in parallel saves the most time. Finance can clean the product and buyer lists while IT sorts out the IP address and the enrolment.

Before your next return

Aim to be live before the next monthly return, then check the first month carefully.

• Compare your sales register with the invoices FBR accepted. Annexure-C is filled from the e-invoices FBR holds.
• Look for invoices with no reply, and check them before resending. FBR does not block duplicates, and an FBR-numbered invoice missing from your return can be taxed.
• Fix any accepted invoice that was wrong within 72 hours, by hand in FBR’s portal, under Sales Tax General Order 01 of 2026.
• Issue debit and credit notes electronically, with the original FBR invoice number, within 180 days of the supply.

The sales made before you went live

A late business has a period when it sold without e-invoices. How to deal with that period depends on your facts, and it is a question for your tax adviser before it is a question for your software. Do not send old invoices to FBR with old dates, or new dates, as a way of tidying up, until you have advice on what the record should show.

If a notice arrives

Since 25 September 2026, SRO 1655(I)/2026 lets FBR’s system send an advance intimation through IRIS when it spots a discrepancy. You get at least seven days to respond, and then a reminder with at least seven more. Do not let it sit. Make sure someone checks the IRIS inbox, and take any notice about integration to your adviser the same week. Being able to show a live integration, or a dated plan already under way, puts you in a better position than a promise.

Claims to ignore

• “The deadline was extended to July 2026.” We have found no notification extending the sales tax timetable. The June 2026 dates applied only to Islamabad service providers.
• “SRO 288 sets the real deadline.” SRO 288(I)/2026 is a draft for income tax integration, issued for comment on 18 February 2026. It is not final, and it is separate from sales tax digital invoicing.
• “Buy our software and you are compliant.” Software makes and sends invoices. Your registration, enrolment and tax treatment are still yours, and so is the advice.

One cost note, for when the budget is discussed. Section 64D now gives a tax credit of 10% of the amount invested in equipment, hardware and software used to integrate with FBR, in the tax year it is installed and fully configured. Recurring fees, including software subscriptions, are excluded. Our section 64D post explains the conditions.

FAQs

Is there still time to meet the FBR digital invoicing deadline? No. Every date in SRO 1852(I)/2025 has passed, the last being 31 December 2025 for all other registered persons. We have found no later extension for sales tax. A business that is not live should catch up as quickly as it can.

What is the penalty for not integrating with FBR? Under section 33, serial 25, as substituted by the Finance Act 2026, up to Rs 1 million, and a second penalty of up to Rs 5 million if the default continues one month later. Business premises can be sealed with or without a penalty. Take advice on your own exposure.

Can FBR suspend our sales tax registration for not integrating? The Finance Act 2026 extended section 21(2), on suspension and blacklisting, to non-compliance with the integration provisions. Business Recorder reported in September 2026 that suspensions had started.

We registered for sales tax recently. When do we need to start? We have found no separate grace period for new registrations. The last SRO 1852 category, all other registered persons, started on 31 December 2025, so plan to integrate as part of registering and confirm with your adviser.

Does federal excise now need e-invoices too? Since 29 September 2026, SRO 1666(I)/2026 and SRO 1667(I)/2026 apply the e-invoicing rules to federal excise duty. A person already integrated for sales tax is treated as integrated for excise.

Related reading: FBR deadlines and notifications, penalties and rejections and eInvoicePro invoicing software.