FBR Digital Invoicing Glossary

Under FBR's Digital Invoicing rules a submitted invoice can be edited or cancelled on the IRIS portal within 72 hours of submission or by the end of the month, whichever comes first. Item details (quantity, rate, tax) can be edited once; header details and the FBR invoice number stay fixed. Cumulative edits are capped at 10% of the previous month's sales. After the window closes, corrections need Commissioner approval.

An API (Application Programming Interface) lets two software systems exchange data automatically. FinSmart uses the PRAL Digital Invoicing API to validate and submit invoice data to FBR and to receive the validation response and FBR invoice number. Reference data such as HS codes, units of measure, sale types and tax rates also comes from FBR's API.

Buyer Verification is the check of a buyer's NTN or CNIC against FBR's registration-type service, which returns whether the buyer is Registered or Unregistered. The result decides the buyer registration type on the invoice and whether further tax applies. FinSmart can perform real-time verification queries before an invoice is submitted. Verification does not replace commercial due diligence such as credit checks.

The Computerized National Identity Card (CNIC) is Pakistan's national identity document, issued by the National Database and Registration Authority (NADRA). The CNIC number has 13 digits. In tax records it identifies individuals, and on a digital invoice it identifies an unregistered buyer who has no NTN. Sole proprietors are also linked to their CNIC in FBR records.

Digital Invoicing is the electronic transmission of sales invoice data to FBR through the PRAL Digital Invoicing API, under Chapter XIV of the Sales Tax Rules 2006. Instead of reporting sales later, the business transmits each invoice when it is issued. FBR validates the data and returns the FBR invoice number, from which the invoicing software generates the QR code printed on the invoice. Which businesses must integrate, and by when, depends on the business category and the latest FBR notification.

The Federal Board of Revenue (FBR) is Pakistan's federal tax authority, responsible for tax collection, enforcement and administration. FBR issues NTNs, runs the IRIS portal, sets the rules for Digital Invoicing, and publishes SROs and circulars. Businesses covered by the Digital Invoicing rules transmit their sales invoices to FBR through the PRAL Digital Invoicing API.

FBR Compliance means meeting the requirements set by the Federal Board of Revenue: correct tax calculation, real-time transmission of invoices through the PRAL Digital Invoicing API where the business is required to integrate, proper records, and filing returns on time. Non-compliance is penalised under Section 33 of the Sales Tax Act 1990, which provides monetary penalties and, for failure to integrate, sealing of business premises.

Goods and Services Tax (GST) is the term many businesses use for Pakistan's sales tax on goods and services. The standard rate is 18%. Reduced, zero and exempt rates apply to goods listed in the schedules of the Sales Tax Act 1990 and in SROs, so check the current schedule or SRO for each item. Invoices must show the rate and tax amount for every line.

An HS Code is the 8-digit Pakistan Customs Tariff code (format 1234.5678) used to classify goods. The first six digits follow the international Harmonized System; the last two are specific to Pakistan. Every item on a digital invoice must carry the correct HS code, because it determines the sales tax treatment and the units of measure FBR accepts for that item. FinSmart looks up HS codes from FBR reference data.

IRIS is FBR's online tax portal (iris.fbr.gov.pk). A business enrols for Digital Invoicing on IRIS, obtains its sandbox and production API tokens there, sees the invoices it has submitted, and edits or cancels them within FBR's 72-hour rule. IRIS enrolment comes before any invoice can be submitted through software such as FinSmart.

IRN is the short name used for the FBR invoice number: the unique number issued by FBR's Digital Invoicing system when an invoice passes validation and is accepted. It is proof that the invoice was transmitted to FBR. The number, together with a QR code generated from it, must be printed on the invoice given to the buyer. The number cannot be changed afterwards; corrections are made on IRIS under FBR's 72-hour rule.

An invoice is the commercial document that itemises goods or services supplied to a buyer, with quantities, unit prices, tax amounts and the total due. For businesses integrated with FBR Digital Invoicing, each invoice must carry the buyer's NTN or CNIC, the HS code and UoM of every item, the applicable tax rates, and the FBR invoice number and QR code returned after submission. Invoices are the legal record of the sale and the basis for sales tax.

Multi-branch operations means running the same business from several locations, each issuing invoices. Each branch's sales still belong to one registered person, so invoice numbering, HS codes and FBR submissions must stay consistent across locations. The linked article explains how to organise multi-branch invoicing with FinSmart.

The National Tax Number (NTN) is the 7-digit identifier issued by Pakistan's Federal Board of Revenue (FBR) to individuals, associations of persons and companies for tax purposes. It is the primary registration number for tax filing, business transactions and dealings with government bodies. On a digital invoice the seller's NTN identifies the business, and a registered buyer is identified by its NTN.

Pakistan Revenue Automation (Pvt.) Ltd (PRAL) is FBR's IT arm. It runs the Digital Invoicing API that businesses use, directly or through software such as FinSmart, to transmit invoice data to FBR. The API validates each invoice and, for a valid invoice, returns the FBR invoice number. The invoicing software then prints that number and a QR code generated from it on the invoice.

A QR Code is a two-dimensional barcode printed on every digital invoice next to the FBR invoice number. It is generated by the invoicing software from the FBR invoice number returned after successful submission; it is not issued by PRAL. Scanning it reveals that number so the buyer or a tax officer can check the invoice against FBR's records.

Sales Tax is the tax charged on taxable supplies of goods and services in Pakistan under the Sales Tax Act 1990. Sellers collect it from buyers and pay it to FBR with the monthly sales tax return (payment by the 15th and return by the 18th of the following month). The standard rate is 18%; reduced, zero and exempt rates apply to items listed in the Act's schedules and SROs. Invoices must show sales tax separately for each line.

Tax Compliance covers everything a business does to meet its legal tax obligations: accurate record-keeping (sales tax records are kept for 6 years), timely filing of returns, correct tax calculation, digital invoice submission where required, and adherence to FBR rules. Non-compliance exposes a business to penalties under Section 33 of the Sales Tax Act 1990 and to audit.

Unit of Measure (UoM) specifies how an item is counted or measured, for example pieces, kilograms, litres or metres. Every invoice line must state its UoM. FBR only accepts units from its own reference list, and the allowed units depend on the item's HS code, so the HS code and UoM must match.