Pakistan FBR makes every advance payment carry its own tax invoice

Pakistan FBR makes every advance payment carry its own tax invoice

5 November 2026: Pakistan's Federal Board of Revenue has replaced Sales Tax Rule 160, and a registered person taking an advance payment must now issue an advance receipt invoice each time money arrives. Each one has to be electronically linked to the earlier ones and to the final sales tax invoice.

Not yet independently verified. The notification states no separate effective date and does not define the "prescribed electronic manner", so neither is given here. We read the PDF through text extraction; check any wording against the original before acting on it. We will update this when it can be confirmed, and remove this note.

What the new Rule 160 requires

S.R.O. 2063(I)/2026 was issued under section 50 of the Sales Tax Act, 1990, read with sections 9 and 23. The substituted rule is titled "Accounting for advance payments against supplies" and covers payment in full, in part or in instalments.

• Each advance gets its own advance receipt invoice with the section 23 particulars, and it counts as a tax invoice for sections 7 and 8
• Output tax is accounted for in the return for the period the money was received
• A later receipt against the same supply must be linked to the earlier ones "in the prescribed electronic manner"
• The final invoice must refer to the advance receipts, and tax is computed only on the value not yet accounted for
• Increases, reductions, refunds and cancellations are adjusted under section 9 and rules 19 to 22

Two tax rates can now apply to one sale

Sub-rule 4 fixes the rate by timing. Each advance takes the rate in force when it is received, and the balance takes the rate at the time of supply. A contract with a deposit before a rate change and delivery after it therefore carries two rates, and the invoices have to show which amount sits under which.

What billing systems will need

Sub-rule 6 is the part that reaches software. Every advance receipt invoice, debit note, credit note and final invoice must be "electronically linked and maintained" as prescribed, or as the Board specifies under section 23, for identification, cross-reference and traceability.

A billing system that treats a deposit as a plain receipt, with no tax document, falls short of that. Finance teams taking milestone or instalment payments should ask their vendor how it will store the link between receipts and the final invoice, and how it applies a rate by receipt date. The notification does not say which format or channel the link must use, so that question stays open until the Board specifies it.

This adds to a run of FBR rules aimed at systems, including Rule 33U on point-of-sale integration. Our listings for invoicing software and accounting software cover products to put those questions to.

The file reference printed on the notification is C. No. 3(50)/ST & FE Policy/2026.

Related on TrustList:

• Pakistan's FBR moves the 2026 tax return deadline to 31 October
• Pakistan’s FBR extends the Tax Year 2026 income tax return deadline to 15 October 2026
• Qatar gives multinationals until January to register for minimum tax

Sources

• Federal Board of Revenue: S.R.O. 2063(I)/2026, Revenue Division notification, 5 November 2026 (PDF), 5 November 2026
• Dawn: Sales tax invoices mandatory on advance payments, 6 November 2026, 6 November 2026
• Business Recorder: FBR mandates sales tax invoices for advance payments, 6 November 2026