Do wholesalers and distributors have to issue electronic invoices integrated with FBR?

A registered wholesaler or distributor has always had to issue a sales tax invoice. The newer question is whether that invoice has to be electronic and reported to FBR in real time. The Sales Tax Act, 1990 answers this in two layers: the Act gives the Board the power, and a Board notification decides who is covered and from when.

What does the law say?

Section 23 of the Sales Tax Act, 1990, as amended to 30 June 2026, contains three powers that matter here:

• Section 23(3): a registered person making a taxable supply shall, subject to conditions the Board specifies by Gazette notification, issue electronic invoices.
• Section 23(5): the Board, through a Gazette notification, “may require any person or class of persons to integrate their electronic invoicing system with the Board’s Computerized System for real time reporting of sales”, from a date specified in that notification.
• Section 23(6): a licensed integrator shall integrate the electronic invoicing system of the persons referred to in sub-section (5), in the mode and manner prescribed.

The Finance Act, 2026 also changed section 23(1) so that a tax invoice is to bear “a verifiable and unique FBR invoice number”. A proviso says that condition applies “from the time as notified by the Board”.

Chapter XIV of the Sales Tax Rules, 2006 (as amended to 30 June 2025) then sets out what a notified person, called an “integrated person”, must do.

What does an integrated distributor have to do?

Rule 150R lists the main obligations:

1. Register, install and integrate electronic invoicing hardware and software with the Board’s computerized system, in the manner set by a Sales Tax General Order.
2. Give the Board details of outlets, points of sale or electronic invoicing machines.
3. Make no supply “except through the integrated outlets, point of sale or electronic invoice issuing machines”.
4. Use a system that transmits each invoice to the Board, receives the unique FBR invoice number, and prints a QR code on it.
5. Issue electronic invoices for exempt items as well.
6. Bear the cost of integration.
7. Display an “Integrated with FBR” signboard at each notified outlet or point of sale.

Rule 150R(5) says Annexure-C of the sales tax return is auto-filled from the electronic invoices. Rule 150R(13) lists the particulars the electronic invoice carries, including the buyer’s name, address and registration number, HS code, quantity, value exclusive of tax, sales tax, further tax and tax withheld.

Rule 150S requires “a real-time verifiable electronic sales tax invoice for every taxable supply and service”, with the invoice, debit notes and credit notes kept on electronic media for six years.

Can the deadline be extended?

Rule 150V lets the Commissioner Inland Revenue having jurisdiction allow an extension of up to sixty days in aggregate, in fifteen-day intervals, for integration or compliance. During that time, the rule says the integrated person “shall continue to issue paper invoices”.

What happens if a notified distributor does not comply?

Rule 150X says an integrated person who tampers with the system, sells otherwise than as the Chapter prescribes, or breaches any of its provisions is subject to penalty under section 33.

Serial 25A of the Table in section 33 covers a person required to integrate under section 23 who fails to register, fails to integrate as required, or fails to issue electronic invoices after integration. The penalties rise with each default:

Default	Penalty under S. No. 25A
First default	Rs. 500,000
Second default, after fifteen days of the order for the first	Rs. 1,000,000
Third default, after fifteen days of the order for the second	Rs. 2,000,000
Fourth default, after fifteen days of the order for the third	Rs. 3,000,000

The same entry also says the business premises “shall be liable to be sealed” by an officer of Inland Revenue in the manner prescribed.

Worked example (illustrative figures)

Qureshi Distributors in Faisalabad is a registered distributor of household goods. Assume the Board has notified its class of persons under section 23(5), and the notified date has passed. The business keeps issuing handwritten invoices.

1. First default recorded: penalty Rs. 500,000.
2. Still not compliant fifteen days after that order: second penalty Rs. 1,000,000.
3. Total so far: Rs. 500,000 + Rs. 1,000,000 = Rs. 1,500,000.
4. If the default continued through a third and fourth order: Rs. 1,500,000 + Rs. 2,000,000 + Rs. 3,000,000 = Rs. 6,500,000, plus possible sealing.

The business name and dates are invented. The amounts are the ones printed in serial 25A.

What if I am not on any notification?

Then the integration duties in rules 150R and 150S are not triggered for you by the Act alone, because they apply to the person notified by the Board. Your ordinary invoicing duty under section 23(1) still applies: a serially numbered tax invoice at the time of supply with the particulars the section lists.

Common mistakes

• Assuming the rules apply to everyone from one fixed date. The Act leaves the class of persons and the start date to Board notifications.
• Treating exempt sales as outside the system. Rule 150R(9) brings exempt items into electronic invoicing for an integrated person.
• Reading the waiver in S. No. 25A as general. Its proviso says “if the retailer integrates” before the second penalty, the first penalty shall be waived. The entry does not say whether this covers a distributor or wholesaler.

What to check in the official text

Read section 23 and serial 25A of the section 33 Table in the Sales Tax Act, 1990, and rules 150R, 150S, 150V and 150X of the Sales Tax Rules, 2006, together with the rest of Chapter XIV. The Gazette notifications under section 23(3) and (5), the Sales Tax General Orders on the manner of integration, and the notified date for the FBR invoice number condition in section 23(1) are not held on this site. Confirm them separately before relying on a start date.