FBR Begins E-Scrutiny of Sales Tax Returns in Pakistan

Published: 27 September 2026 | By Umair A. R. Mughal

Most sales tax registered businesses only found out something was wrong with their return after a show cause notice arrived, often months later, with a demand, penalty and default surcharge attached. That is what the FBR’s new e-scrutiny system is meant to change.

The Federal Board of Revenue (FBR) has launched electronic scrutiny (e-scrutiny) of sales tax returns. Its computer system will now cross-check your returns automatically, flag problems, and alert you through IRIS so you can fix them before any legal or criminal action begins.

This is a chance to put things right early, but you need to act fast. Here is how it works and what you need to do.

What the FBR Has Changed

Through SRO 1655(I)/2026, the FBR added a new chapter to the Sales Tax Rules, 2006: Chapter XII-A, “Procedure for Electronic Scrutiny and Intimation of Issues Detected by the Computerised System”.

How E-Scrutiny Works: A Step-by-Step Guide

1. Your return is checked by the system. When you file, the FBR’s computer system cross-checks your return against other data: your suppliers’ returns, your buyers’ records, digital invoicing data, and other information the FBR holds.
2. The system identifies a gap. It flags a factual or legal issue, such as a mismatch, an input tax claim it cannot support, or an incorrect rate.
3. You get an advance intimation in IRIS. The FBR sends an online intimation describing the problem, before any show cause notice or legal action.
4. You have at least 7 days to respond. In that time you can explain why your return is correct with supporting documents, fix the error by amending the return or paying the tax difference, or take other corrective steps as required.
5. A reminder follows if you do not respond. Ignore the first intimation and a second reminder arrives, giving you at least 7 more days.
6. An officer reviews your case. Every discrepancy, intimation and response is logged on a system dashboard your Inland Revenue officer can view. The officer reads your reply and decides what happens next. If you do not respond, or the matter is not resolved, legal and punitive action may follow under the Sales Tax Act, 1990.

What Mistakes Will Be Flagged?

The SRO refers generally to “factual or legal mistakes and discrepancies” without listing specific checks. Based on the data the FBR already holds and routinely analyses, these are the most likely triggers for an intimation:

• Input tax mismatch: input tax you claimed in Annex-A that does not match what your supplier declared in their Annex-C.
• Purchases from problem suppliers: invoices from suppliers who are suspended, blacklisted, not filing returns, or not on the ATL.
• Sales to unregistered buyers where extra tax was not levied as required.
• Digital invoicing gaps: invoices generated through the FBR’s digital invoicing system that are not reflected in your return’s sales.
• Incorrect tax rates: products taxed at a reduced or nil rate that do not qualify.
• Input tax limits: input tax adjusted beyond the allowed limit.
• Turnover discrepancies: sales on your sales tax return that do not match your income tax return or withholding data.

If any of these apply to your return, watch for a notice in IRIS. See our guide on Sales Tax Return Clause 7a, 7b and 7c Explained.

What E-Scrutiny Means for Your Business

The upside

• A chance to fix errors before penalties apply. Previously, many mistakes went straight to a show cause notice. Now you get a warning first.
• Less face-to-face contact. Like the FBR’s new National Faceless Center for income tax audits, e-scrutiny reduces personal contact with officers and the discretion that comes with it.
• A documented trail. Every intimation and reply is logged, which helps you if the case later goes to appeal.

The risks

• One week goes fast. If you check IRIS only once a month, you could miss both the intimation and the reminder.
• Silence counts against you. An unanswered intimation stays open on your officer’s dashboard.
• Your suppliers’ problems become yours. If a supplier files late or not at all, your input tax claim can be flagged even when your own records are correct.

How to Prepare for Sales Tax E-Scrutiny

• Check your IRIS inbox at least once a week, not just on filing day.
• Update your email address and mobile number in IRIS so intimations reach you.
• Reconcile Annex-A before filing by comparing your input tax claims with your suppliers’ declared sales.
• Check your suppliers’ status monthly, and stop buying from vendors who are suspended, blacklisted or inactive.
• Make sure your digital invoicing data matches your return before you submit it.
• Keep paperwork ready: invoices, bank payment records, delivery documents and contracts, so you can reply within the 7-day window.
• Respond to every intimation, even if your return is correct. A brief, documented explanation closes the matter; no response leaves it open.

Related: How to Check Your Status as FBR Begins Suspending Sales Tax Registrations.

Frequently Asked Questions

What is e-scrutiny of sales tax returns?

It is an automated FBR system that cross-checks sales tax returns against other data, identifies issues, and informs the taxpayer through IRIS so they can correct the problem before legal action.

Which SRO introduced e-scrutiny?

SRO 1655(I)/2026, which added Chapter XII-A to the Sales Tax Rules, 2006.

How long do I have to respond to an e-scrutiny intimation?

At least 7 days. If you do not respond, the FBR issues a reminder giving you at least 7 more days.

What happens if I ignore the intimation?

The matter goes to your Inland Revenue officer, who may initiate legal and criminal action under the Sales Tax Act, 1990.

Is an e-scrutiny intimation the same as a show cause notice?

No. It is an advance alert issued before any formal action. Treat it seriously and use the opportunity to explain or correct the issue.

Where will I receive e-scrutiny intimations?

Through your IRIS account. Keep your registered email and mobile number current, and check your IRIS inbox regularly.

Received an E-Scrutiny Intimation? We Can Help

TaxAccountant.pk helps businesses respond to FBR intimations, reconcile Annex-A and Annex-C, revise sales tax returns, and handle any follow-up action.

• WhatsApp / call: +92 339 505 0983
• Email: info@taxaccountant.pk
• Address: Office 1, First Floor, United Plaza, Main Service Road, Khanna Pull, Rawalpindi

See our sales tax return filing services.