Sales Tax on Online Shopping and E-commerce in Pakistan

Pakistan's e-commerce sector has grown rapidly, and FBR has correspondingly tightened its focus on ensuring online sellers follow the same sales tax obligations as traditional retailers — a shift that's caught a fair number of online sellers off guard.

Online sellers aren't exempt from GST

If you're selling physical goods through an online store, a social media page, or a marketplace platform, you're subject to the same federal GST registration and collection requirements as a brick-and-mortar retailer once you cross the relevant turnover threshold. "It's just an Instagram shop" doesn't exempt you from sales tax obligations that apply based on your actual business activity and turnover.

Marketplace platforms and withholding

Larger e-commerce marketplaces operating in Pakistan have increasingly been brought into withholding tax and reporting frameworks, where the platform itself may be required to withhold tax on payments made to sellers using the platform, and to report seller transaction data to FBR. If you sell through a major marketplace, check your seller agreement for how tax withholding on your payouts is handled — it may already be happening without you tracking it separately.

Digital services and provincial tax

If your online business is service-based — digital marketing, online courses, app development, design services sold through a website — rather than physical goods, you likely fall under provincial sales tax on services instead of federal GST, following the same PRA, SRB, KPRA, or BRA structure that applies to any other service business in your province.

Registering your online business properly

• Register for an NTN through FBR's IRIS portal identifying your e-commerce business activity
• Register for federal GST if you sell physical goods above the applicable threshold
• Register for provincial sales tax on services if your online business is service-based
• Keep proper transaction records — order confirmations, payment receipts, delivery records — since digital businesses sometimes have less formal paper trails than traditional retail, which can complicate matters during any tax review

Import-based e-commerce (dropshipping and resale)

If your online business involves importing goods for resale — a common model for many online stores — you'll also face import duty and sales tax on imports at the point of customs clearance, calculated on your CIF value. Use our customs duty calculator to understand your total landed cost before pricing your products, and our sales tax calculator for the GST you'll then need to charge on the resale.

Getting ahead of it

If your online business has grown from a side project into meaningful revenue, this is the point to register properly rather than waiting for a notice. The registration and filing process is genuinely more manageable when done proactively than when it's prompted by an FBR compliance query after the fact.

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