Can FBR seal my shop for not integrating POS, and how is it de-sealed?

What does the law say?

The Sales Tax Act, 1990 makes the premises of a non-integrated Tier-1 retailer liable to sealing, and the Sales Tax Rules, 2006 set out how.

In the section 33 table, serial 25A says the business premises of a person who fails to register or integrate “shall be liable to be sealed by an officer of Inland Revenue in the manner prescribed”. Serial 25, as substituted by the Finance Act, 2026, adds that the premises are liable to be sealed “with or without imposition of penalty”.

The “manner prescribed” is Chapter XIV-AD of the Sales Tax Rules, 2006:

• Rule 150ZEN(2) applies the chapter to any person who is required by the Act to integrate as a Tier-1 retailer and fails to register, or if registered, fails to integrate as the law and rules require.
• Rule 150ZEP sets the sealing steps for non-integrated Tier-1 retailers.
• Rule 150ZER sets the de-sealing steps.

How is a shop sealed?

Rule 150ZEP lays down four steps.

1. Officer’s report. An Officer Inland Revenue, not below the rank of Assistant Commissioner, with territorial jurisdiction reports in writing to the Commissioner that the Tier-1 retailer is not integrated in violation of the Act, recommending sealing under serial 25A.
2. Commissioner’s inquiry. The Commissioner conducts an inquiry and forwards the report to the Chief Commissioner, “citing cogent reasons” for sealing and naming the team of officers and officials who will carry it out.
3. Chief Commissioner’s written order. The Chief Commissioner issues a written order allowing or disallowing sealing, with reasons recorded. If sealing is allowed, the Chief Commissioner notifies the team immediately.
4. Reporting. The sealing order goes to the Member (IR-Operations) for information and a copy to Chief (POS) for record.

Where the retailer falls under another field formation, the Commissioner seeks approval from the Chief Commissioner of that jurisdiction, and the Chief Commissioner asks the Board to notify the team.

How is a shop de-sealed?

Rule 150ZER sets the conditions.

1. Penalty order. The Commissioner with jurisdiction imposes a penalty by order under serial 25A. Under serial 25A that is Rs. 500,000 for a first default, rising to Rs. 1 million, Rs. 2 million and Rs. 3 million for later defaults.
2. Payment and full integration. The premises “shall remain sealed till the payment of penalty and integration of all POS machines installed in all its branches or outlets”.
3. Integration under supervision. Integration is carried out in the presence of an FBR team formed by the Commissioner, which must include a technical person.
4. Certificate. Within three days, the Commissioner gives the Chief Commissioner a written certificate that all POS machines are integrated and free from technical and functional errors.

Worked example (illustrative scenario)

A garments retailer with two outlets in Karachi, both in an air-conditioned mall, has registered but not integrated either outlet. The details are invented.

1. An Assistant Commissioner visits, finds no integrated POS, and reports in writing to the Commissioner recommending sealing under serial 25A.
2. The Commissioner inquires, then sends the report to the Chief Commissioner with reasons and a named team.
3. The Chief Commissioner issues a written order allowing sealing and notifies the team, which seals the premises.
4. The Commissioner passes a penalty order under serial 25A for the first default: Rs. 500,000.
5. The retailer pays Rs. 500,000 and arranges integration of the POS machines at both outlets, done in front of the FBR team with its technical member.
6. The Commissioner certifies to the Chief Commissioner within three days that all POS machines are integrated and error free.

Integrating only the sealed outlet would not meet rule 150ZER(2), which speaks of all branches or outlets.

What if the retailer had integrated before the second penalty?

The serial 25A proviso says the Commissioner shall waive the first-default penalty if the retailer integrates before the second-default penalty is imposed. Rule 150ZER(2) still speaks of “payment of penalty”. The text does not say how a waived penalty interacts with the de-sealing condition, so this page does not settle that point.

What if the shop was sealed for fake invoices, not non-integration?

That is a different route. An integrated retailer found issuing unverified invoices is sealed under rule 150ZEO and de-sealed under rule 150ZEQ, with a penalty under serial 24. See the related page on fake invoices from an integrated POS.

Common mistakes

• Assuming any officer can seal on the spot. Rule 150ZEP requires a written report, an inquiry by the Commissioner and a written order of the Chief Commissioner.
• Paying and expecting the shop to reopen. Payment alone is not enough. Every POS machine in every branch must be integrated.
• Ignoring the gas and electricity risk. Section 14AB separately allows the Board to have utility connections of non-integrated notified Tier-1 retailers cut, restored once they integrate.
• Looking for an appeal step in rule 150ZER. Rule 150ZEQ for integrated retailers mentions filing an appeal against the penalty order; rule 150ZER does not. The general appeal provisions of the Act are outside the scope of this page.

What to check in the official text

Read rules 150ZEN, 150ZEP and 150ZER in Chapter XIV-AD of the Sales Tax Rules, 2006 as amended to 30 June 2025, and serials 25 and 25A of the section 33 table in the Sales Tax Act as amended to 30 June 2026. Serial 25 was rewritten by the Finance Act, 2026, after the latest edition of the Rules we hold, so check whether the Board has since amended Chapter XIV-AD.