FBR to Strictly Enforce Sales Tax Rules on Coal Imports

The Federal Board of Revenue (FBR) has introduced a stricter framework governing the application of the 1% minimum value addition sales tax on coal imports, limiting the concession exclusively to coal imported for direct supply to coal-fired Independent Power Producers (IPPs) licensed by the National Electric Power Regulatory Authority (NEPRA).

 

Under Sales Tax General Order (STGO) No. 9 of 2026, issued on Tuesday, the FBR outlined the procedures and conditions for availing the reduced sales tax rate on imported coal.

 

According to the order, the concession will only be available to importers registered under the Sales Tax Act, 1990. In addition, the imported coal must be intended solely for direct supply to a NEPRA-licensed coal-fired IPP.

 

Importers will also be required to submit documentary evidence at the time of import, including purchase orders, supply agreements, contracts, or other documents demonstrating that the coal is exclusively destined for an eligible power producer.

 

The FBR further directed importers to maintain complete records covering both the import and subsequent direct supply of the coal. These documents must be produced upon request by the Commissioner Inland Revenue or the Collector of Customs.

 

The tax authority also stated that eligible importers must comply with all verification and audit requirements prescribed under the Sales Tax Act, 1990, and the relevant rules.

 

The new framework is intended to ensure that the 1% minimum value addition sales tax is applied only to qualifying coal imports while strengthening compliance and preventing misuse of the concession.