KPRA Penalties in Khyber Pakhtunkhwa: Late Return Rs 10,000, Default Surcharge 24% a Year

A late sales tax return in Khyber Pakhtunkhwa costs Rs 10,000 per tax period, or Rs 300 a day if you file within 10 days of the due date. Unpaid tax adds a default surcharge of 24 per cent a year, or 36 per cent where there is tax fraud. The Khyber Pakhtunkhwa Finance Act 2026 replaced the whole penalty table from July 2026.

These penalties sit in sections 53 and 54 of the Khyber Pakhtunkhwa Sales Tax on Services Act, 2022, which the Khyber Pakhtunkhwa Revenue Authority (KPRA) enforces. We read KPRA's updated copy of the Act on 20 October 2026. Its footnote says the penalty table was substituted by the Finance Act 2026, assented on 1 July 2026. If you run a restaurant, salon, consultancy or any taxable service in KP, here is what each slip now costs.

A late KPRA return costs Rs 10,000, or Rs 300 a day for 10 days

Serial 4 of the section 53 table charges Rs 10,000 for each tax period, or part of one, when a return is filed after the due date. If you file within 10 days of the due date, the penalty is Rs 300 for each day instead.

The day rates are our sums from the Rs 300 figure. The jump after day 10 is steep, from Rs 3,000 to Rs 10,000. So if you have missed the date, file in the first ten days even if the return is not perfect. Our guide to filing a KPRA sales tax return covers the steps.

Unpaid tax carries a default surcharge of 24 per cent a year

Section 54 adds default surcharge on tax not paid on time, at 24 per cent a year. Where the default comes from tax fraud, the rate is 36 per cent until the whole liability is paid. Any part of a month counts as a full month.

In the words of the Act, the period runs from the 16th day of a month following the due date of the tax period, to the day before you pay. For wrongly claimed input tax or refund, it runs from the date of the adjustment or refund. Tax due here does not include penalties, so surcharge is not charged on a penalty.

These are our own sums, at 2 per cent a month for 24 per cent a year. Because part of a month counts as a whole month, paying on the 2nd of a month instead of the 30th of the month before can add a full month of surcharge.

The new table raises the stakes on registration and invoices

Providing taxable services without applying for registration costs Rs 200,000 or 5 per cent of the tax, whichever is higher. Ignoring a compulsory registration raises the minimum to Rs 400,000. Faulty or missing tax invoices cost Rs 200,000 or 5 per cent of the tax.

RIMS is the Restaurant Invoice Management System and IMRS the Invoice Management and Reporting System, KPRA's real-time invoice links. Serial 18 doubles the punishment for a repeat offence. Fraud with false documents, under serial 14, carries Rs 500,000 or 100 per cent of the tax, plus possible prison of up to five years.

Cut your risk with five monthly habits

Most of these penalties come from missed dates and missing paper, not from big fraud. File and pay on time, report changes within 15 days, issue every invoice through the system, and keep records. That alone avoids serials 3, 4, 5, 7 and 12.

1. Pay the tax by its due date, because late tax starts the 24 per cent surcharge clock.
2. File the return on time, or at worst within 10 days.
3. Report any change of address, bank account or business within 15 days.
4. Issue every invoice through RIMS, IMRS or the prescribed system if you are integrated.
5. Keep invoices and records ready to show if KPRA sends a notice.

Not registered yet? Start with KPRA sales tax registration, because serial 1 is the most expensive first mistake. The federal rules for goods are different and sit in our page on the FBR late sales tax return penalty.

You can challenge a penalty, and the government can waive it

A penalty order by a KPRA officer can be appealed to the Collector (Appeals) within 30 days. Section 55 also lets the KP government waive all or part of penalties and default surcharge by notification. Section 73 lets you seek dispute resolution on a waiver.

A waiver comes only by a published notification, so do not count on one. If a penalty looks wrong, the appeal clock is the one that matters.

Common questions

What is the KPRA penalty for a late return?

Rs 10,000 per tax period, or Rs 300 a day if the return is filed within 10 days of the due date, under serial 4 of section 53.

What is the default surcharge rate in KP?

24 per cent a year on unpaid tax, or 36 per cent where the default comes from tax fraud, under section 54.

When did the new KPRA penalty table start?

KPRA's copy of the Act says the table was substituted through the Finance Act 2026, assented on 1 July 2026.

Is default surcharge charged on penalties?

No. Section 54 says tax due, for surcharge, does not include the amount of penalty.

What happens if I repeat an offence?

Serial 18 makes the punishment twice the amount set for that offence.

Can a restaurant be fined for not installing RIMS?

Yes. Serial 6 sets Rs 500,000 or 5 per cent of the tax, whichever is higher, for each instance.

How we verified this

What we checked, where we read it, and what we could not confirm.

Last checked on 20 October 2026. We read sections 39, 53, 54, 55 and 66 of the Khyber Pakhtunkhwa Sales Tax on Services Act, 2022, updated with the Finance Act 2026, linked from the KPRA website. The penalty and surcharge examples are our own sums. We did not confirm the monthly return due date from a KPRA notification, or whether any waiver notification is in force.