Late Sales Tax Return in Pakistan: Rs 2,000 a Day Inside 10 Days, Rs 50,000 After
A late sales tax return costs Rs 2,000 a day for 10 days, then Rs 50,000, plus 12 per cent default surcharge. See the Act, a worked example and how to pay.
Short answer: A sales tax return is due by the 15th of the month after the tax period. Under the Sales Tax Act as amended up to 30 June 2026, filing late costs Rs 50,000, or Rs 2,000 a day if you file within 10 days. Unpaid tax also carries default surcharge at 12 per cent a year or KIBOR plus 3 per cent, whichever is higher.
A small trader in Gujranwala files his sales tax return on the 18th every month. He thinks three days is nothing. The Act says otherwise, and the cost has two parts that people mix up: a penalty for the late return and a surcharge for the late money.
We read the Sales Tax Act, 1990, as amended up to 30 June 2026, on FBR's own website on 12 October 2026. Sections 2, 26, 33 and 34 are the ones used below.
The sales tax return is due on the 15th of the following month
The Act defines the due date as the 15th day of the month following the end of the tax period, or another date the Board notifies in the Gazette. For the August tax period, the usual due date is 15 September.
FBR does move this date. It extended the August 2026 return for some taxpayers, as set out in the extension of the August sales tax return to 2 October. Always check the notified date for your tax period before you count a delay.
A late return carries a penalty of Rs 50,000 or Rs 2,000 a day
Section 33 sets a penalty for failing to furnish a return by the due date. The Act, as amended up to 30 June 2026, shows Rs 50,000. A proviso lowers it if you file within ten days of the due date: Rs 2,000 for each day of default.
| When you file | Penalty under section 33 |
|---|---|
| On or before the due date | None |
| Within 10 days of the due date | Rs 2,000 for each day of default |
| After more than 10 days | Rs 50,000 |
Three days late therefore costs Rs 6,000 under the proviso, on top of any surcharge on unpaid tax. Ten days costs Rs 20,000. The eleventh day moves you to the full Rs 50,000.
Unpaid tax adds default surcharge at 12 per cent a year or KIBOR plus 3
Section 34 charges default surcharge on tax not paid in time. The rate is 12 per cent a year, or KIBOR plus 3 per cent a year, whichever is higher. It applies to the amount of tax due, and it is on top of the tax itself.
The surcharge is counted from the 16th day of the month after the tax period, the day after the due date, to the day before you actually pay. Penalty is not part of the amount the surcharge is charged on.
KIBOR is the Karachi interbank rate and it changes. Check the current figure before you work out the higher rate. At 12 per cent, the maths is simple:
| Tax unpaid | Days late | Surcharge at 12 per cent a year |
|---|---|---|
| Rs 100,000 | 30 days | About Rs 986 |
| Rs 100,000 | 90 days | About Rs 2,959 |
| Rs 500,000 | 30 days | About Rs 4,932 |
| Rs 500,000 | 90 days | About Rs 14,795 |
These are our own worked examples using 12 per cent over 365 days. If KIBOR plus 3 is higher, the figure is higher. They are not a bill from FBR.
Wrong credits and fraud are charged more heavily
Default surcharge also applies when you claim an input tax credit or refund you were not entitled to, or apply zero rate wrongly. For tax fraud the rate is 2 per cent a month on the tax evaded or the refund fraudulently claimed, until everything is paid.
That is a very different bill. Keep invoices and bank proof as set out in the six year sales tax record rules, because they are what you rely on if a credit is questioned.
How to work out and pay what you owe
File the return first, then pay the tax and the surcharge together. The return itself is explained step by step in how to file a monthly sales tax return. Count the days from the due date, not from the day you noticed.
- Find the notified due date for your tax period. The default is the 15th of the next month.
- File the return as soon as you can, even if you cannot pay in full.
- Count the days of delay and pick the penalty: Rs 2,000 a day inside 10 days, Rs 50,000 after.
- Work out default surcharge at 12 per cent a year, or KIBOR plus 3 if that is higher.
- Pay the tax, the penalty and the surcharge with the correct PSID.
- Keep the return acknowledgement and the payment receipt with your sales tax file.
The Board can waive penalty and surcharge in special cases
Section 34A lets the Federal Government, by notification, or the Board, by a special order published in the Gazette, exempt a person or class of persons from the whole or part of the penalty and default surcharge. It happens by notification, not on request at the counter.
Watch for such notifications, and when one appears, check its conditions and cut-off date before you rely on it. A waiver notification usually has a deadline.
Common questions
What is the due date for a monthly sales tax return?
The 15th day of the month following the tax period, unless the Board notifies another date in the Gazette.
How much is the penalty for a late sales tax return?
Rs 50,000, or Rs 2,000 for each day of default if you file within 10 days of the due date, under section 33 of the Act as amended up to 30 June 2026.
What is default surcharge on sales tax?
It is a charge on unpaid tax at 12 per cent a year or KIBOR plus 3 per cent a year, whichever is higher, under section 34.
Does the surcharge apply if I file a nil return late?
The surcharge applies to tax not paid, so a nil return has none. The late return penalty can still apply.
Does the penalty count towards the default surcharge?
No. The Act says the tax due, for surcharge, does not include the amount of penalty.
Can FBR waive the penalty?
Only by a notification or a special order under section 34A. It is not something you can claim by letter alone.
How we verified this
What we checked, where we read it, and what we could not confirm.
We read sections 2(9), 26, 33, 34 and 34A of the Sales Tax Act, 1990, amended up to 30 June 2026, published by the Federal Board of Revenue, on 12 October 2026. We could not confirm from the Act itself the date from which the 2026 penalty amounts apply, so check the notified date for your tax period. This page is general information, not tax advice.
About the author
Global Affairs & Political Economy Writer
Muhammad Hatim is a book lover who started writing because he enjoys it. At Pakistan Era he writes about international relations, geopolitics and the global economy, with a particular interest in South Asia and the forces behind current events.
