Manufacturers and wholesalers sit in the middle of Pakistan’s tax collection chain. They charge and claim sales tax, collect advance income tax from their buyers, and have tax deducted by their own customers. Keeping those flows straight is most of the compliance work.
The points where tax and accounting rules come into play are numbered.
Numbered points are explained below.
At: Buy materials
Input tax you cannot support is input tax you cannot claim. Supplies of goods are taxed federally under the Sales Tax Act, 1990; manufacturers above the registration threshold register with FBR, charge sales tax on supplies and claim input tax on purchases, subject to the Act’s conditions.
We check your registration position and the conditions behind each claim before the return is filed.
At: Sell and ship
Advance tax you collect from buyers has to be deposited, and advance tax you pay has to be claimed, or it becomes a cost. Under section 236G, manufacturers and commercial importers collect advance tax on sales to distributors, dealers and wholesalers, and under section 236H on sales to retailers; the Finance Act 2024 extended both to all sectors, and the tax is adjustable by the buyer.
We make sure it is collected, deposited and claimed correctly.
At: Collect
Tax your customers deduct is yours to claim, but only with certificates that match your invoices. Customers who are prescribed persons deduct income tax under section 153 when they pay for goods.
We match the certificates to invoices and claim them in your return.
At: Year-end count
Stock is where input tax claims, cost of sales and the audit meet. Stock records connect purchases, production and sales, and they are a focus of any statutory audit.
We help you keep stock and costing records that tie to your sales tax and income tax returns.
Stock, costing and invoice-level records support sales tax and income tax filings.
Monthly sales tax returns and the annual return must reconcile with each other and with withholding.
Manufacturing companies are subject to statutory audit under the Companies Act 2017.
Working capital, costing and bank reporting need regular attention.
For the seller it is tax collected on behalf of FBR. For the buyer it is adjustable against their own tax. We make sure it is collected, deposited and claimed correctly.
Manufacturers generally need to register once they cross the threshold in the Sales Tax Act. Registration is through FBR’s IRIS portal. We check your position.