Can FBR post an officer at my restaurant or bakery to monitor sales?

The Sales Tax Act, 1990 and the Sales Tax Rules, 2006 give the Federal Board of Revenue several ways to watch a registered restaurant’s sales: posting an officer on the premises, electronic monitoring, and routine visits to check the invoicing system. Each applies to registered persons, and each is described below with its limits.

What does section 40B allow?

Section 40B of the Sales Tax Act, as amended to 30 June 2026, lets the Board post an officer of Inland Revenue “to the premises of registered person or class of such persons to monitor production, sale of taxable goods and the stock position”. The posting is subject to whatever conditions and restrictions the Board thinks fit to impose.

Three features stand out:

1. It applies to registered persons, individually or as a class.
2. Its stated purpose is monitoring production, sale of taxable goods and stock.
3. The section itself sets no time limit, notice period or warrant requirement. Those would come from the Board’s conditions, which are not held in this corpus.

What is electronic monitoring under section 40C?

Section 40C(1) lets the Board, by notification in the official Gazette, specify registered persons or classes of registered persons, or goods, for monitoring or tracking of “production, sales, clearances, stocks or any other related activity” through electronic or other means. Sub-sections (2), (3) and (6), as substituted and added by the Finance Act, 2026, deal mainly with tax stamps, banderoles and production monitoring for taxable goods removed by manufacturers.

What do the Sales Tax Rules require from restaurants?

Chapter XIV-A of the Sales Tax Rules, 2006, as amended to 30 June 2025, is headed monitoring or tracking of certain registered persons by electronic or other means. Rule 150ZA applies it to registered persons being “restaurants, cafes, coffee shops, eateries, snack bars and hotels having any of such business activities”.

• Rule 150ZC requires them to give “continuous and full remote as well as on-site access” to records, documents and data, whether kept electronically or otherwise, whenever the officer of Inland Revenue having jurisdiction requires it.
• Rule 150ZE makes failure to comply with the chapter liable to penal action under the Act.

What are the periodic visits under rule 150XD?

Rule 150XD sits in Chapter XIV, which covers integration of electronic invoicing for registered persons the Board notifies, called “integrated persons”. Under rule 150XD(1), the officer of Inland Revenue having jurisdiction monitors the system “through periodic visits authorized in this behalf by the Commissioner”. Under rule 150XD(2), where an integrated person does not account for sales without generating an invoice carrying the QR code or FBR invoice number, the officer computes the taxes on those unaccounted sales and recovers them, alongside any penal action.

Worked example (illustrative figures)

Chai Khana, a registered cafe in Saddar, Rawalpindi, is an integrated person with two point of sale counters. The facts are made up.

• An Inland Revenue officer arrives on a visit authorised by the Commissioner under rule 150XD(1).
• The officer asks to see the day’s sales data. Rule 150ZC requires the cafe to give on-site access, and also remote access when required.
• The officer finds 40 handwritten slips totalling Rs. 96,000 that carry no FBR invoice number.
• Under rule 150XD(2), the officer computes the tax on those Rs. 96,000 of unaccounted sales and recovers it, and penal action under the Act may follow.

The rate applied to those sales depends on where the cafe is and what it supplies. Restaurant services are taxed by the provinces, or in Islamabad under the ICT (Tax on Services) Ordinance, and provincial rates are outside this corpus.

What if my restaurant is not registered under the Sales Tax Act?

Section 40B, section 40C and Chapter XIV-A all refer to registered persons. Whether a particular restaurant must register is a separate question. Registration and taxation of restaurant services under provincial law are outside this corpus.

What if the officer wants more than sales records?

Rule 150ZC covers records, documents and data maintained electronically or otherwise. Section 40B speaks of monitoring production, sale of taxable goods and stock. Neither text lists specific documents beyond those words, and this page does not add to them.

Common mistakes

• Treating the rule 150ZC duty as occasional. It requires continuous access, remote as well as on-site, as and when required.
• Assuming an officer can only come with a warrant. Neither section 40B nor rule 150XD mentions a warrant as a condition of the posting or visit.
• Keeping sales off the integrated system. Rule 150XD(2) lets the officer compute and recover tax on sales made without an FBR invoice number.

What to check in the official text

Read sections 40B and 40C of the Sales Tax Act as amended to 30 June 2026, and rules 150ZA to 150ZE and 150XD of the Sales Tax Rules, 2006 as amended to 30 June 2025. Board notifications naming classes of persons under section 40B or 40C, and Commissioner authorisations for visits, are not held in this corpus.