What records and stock register must a registered wholesaler keep, and for how long?

A registered wholesaler’s records are what a sales tax audit is built on. The Sales Tax Act, 1990 sets out what must be kept in section 22, how long in section 24, and how an officer examines them in section 25. A missing ledger can cost a penalty on its own, before any tax is found short.

What records does section 22 require?

Section 22(1) requires a registered person making taxable supplies to keep, at the business premises or registered office, in English or Urdu, records of goods purchased, imported and supplied, including zero-rated and exempt supplies, “in such form and manner as would permit ready ascertainment of his tax liability during a tax period”. The list is:

Clause	Record
(a)	Supplies: description, quantity and value of goods, name and address of the buyer, and tax charged
(b)	Purchases: description, quantity and value, supplier’s name, address and registration number, and tax on purchases
(c)	Imports: description, quantity, value and tax paid on import
(d)	Zero-rated and exempt supplies
(da)	Double entry sales tax accounts
(e)	Invoices, credit notes, debit notes, bank statements, banking instruments, inventory records, utility bills, salary and labour bills, cash book, rental, sale purchase and lease agreements
(ea)	Gate passes, inward or outward, and transport receipts
(eb)	Electronic version of the records in (a) to (ea)
(f)	Other records specified by the Board

Section 22(1A) lets the Board require a registered person to declare and use only a specified number of business bank accounts for purchase and sale payments. Section 22(4) requires a person whose accounts are audited under the Companies Ordinance, 1984 to submit the annual audited accounts with an auditor’s certificate of payment of due tax.

For a distributor, rule 14 of the Sales Tax Rules, 2006 adds a return-side duty: registered commercial importers, distributors and wholesalers of taxable goods furnish details of goods purchased or imported and goods supplied in Annex-H1 of the monthly return. In practice this ties the inventory records in section 22 to what is reported each month.

How long must the records be kept?

Section 24 says a person required to keep records shall retain them for six years after the end of the tax period to which they relate, “or till such further period the final decision in any proceedings including proceedings for assessment, appeal, revision, reference, petition and any proceedings before an alternative Dispute Resolution Committee is finalized”.

How are the records used in an audit?

Under section 25, the Commissioner may, on reasons recorded in writing and communicated in the notice, direct an audit of a registered person’s sales tax affairs. After the notice, the officer may call for records, including electronic data, and the registered person shall allow access to the machine and software. The proviso to section 25(4) bars calling for records more than six years after the end of the financial year to which they relate.

Section 25(7) says the audit verifies declared liability, output tax, input tax, tax paid, refunds and “stocks consumed or available”. That is where inventory records and gate passes matter. The Finance Act, 2026 added section 25(8B), requiring an audit report after the officer obtains the registered person’s explanation on the issues raised.

Worked example (illustrative figures)

Malik Brothers, a registered distributor of edible goods in Peshawar, receives an audit notice. The names and amounts are invented; the penalty figures are from serials 8 and 9 of the section 33 Table.

1. The firm does not produce its records on the first notice: Rs. 5,000.
2. It fails again on the second notice: Rs. 10,000.
3. It fails on the third notice: Rs. 50,000.
4. If all three are imposed: Rs. 5,000 + Rs. 10,000 + Rs. 50,000 = Rs. 65,000.

Separately, suppose the officer finds the firm kept no inventory records and the tax involved is Rs. 1,400,000. Serial 8 sets Rs. 50,000 or 5% of the tax involved, whichever is higher. 5% of Rs. 1,400,000 is Rs. 70,000, which is higher, so the penalty is Rs. 70,000.

What if an appeal is still running after six years?

Section 24 extends retention until the final decision in the pending assessment, appeal, revision, reference, petition or ADR proceeding. Records for July 2020 would ordinarily be kept until at least July 2026, but longer if that period is still under appeal.

What if I find a mistake before the audit notice?

Section 25(11) says that if a registered person voluntarily deposits the tax short paid with default surcharge before receiving an audit notice, no penalty shall be recovered. If the deposit is made during the audit or before a show cause notice, the person pays 25% of the section 33 penalty; after a show cause notice, 50%.

Common mistakes

• Keeping only invoices. Section 22 also requires inventory records, gate passes, transport receipts and double entry sales tax accounts.
• Discarding files after five years. The Act says six years, and longer while proceedings are pending.
• Keeping records at home. Section 22(1) says the business premises or registered office.

What to check in the official text

Read sections 22, 24 and 25 of the Sales Tax Act, 1990 as amended to 30 June 2026, serials 8 and 9 of the section 33 Table, and rule 14 of the Sales Tax Rules, 2006. Any Board notification specifying additional records under section 22(1)(f) or (2), bank account limits under section 22(1A), or electronic record software under section 22(3) is not held on this site.