Can FBR seal my restaurant or bakery, and on what grounds?

FBR can seal the business premises of a Tier-1 restaurant, cafe or bakery on two separate grounds set out in Chapter XIV-AD of the Sales Tax Rules, 2006. The first is misuse of an integrated point of sale system, such as fake, duplicate or unverified invoices. The second is failing to register or integrate at all. Each ground has its own approval steps and its own route to reopening.

What does the law say?

Rule 150ZEN says the chapter applies to two groups:

1. Integrated outlets that misuse the system. Any person integrated with the Board’s computerized system who conducts transactions so as to avoid monitoring, tracking, reporting or recording, or “issues an invoice which does not carry the prescribed invoice number or barcode or QR code or bears duplicate invoice number or counterfeit barcode or QR code”.
2. Tier-1 outlets that are not integrated. Any person required to integrate under section 3(9A) read with section 2(43A) of the Act who fails to register, or if registered, fails to integrate as the law and rules require.

The Act itself makes the premises liable to sealing in the section 33 table: under serial 24 for invoice misuse by an integrated person, and under serials 25 and 25A for failure to register or integrate.

Ground 1: an integrated outlet’s invoices or connection

Rule 150ZEO sets the procedure. The Commissioner with territorial jurisdiction may start proceedings on information that the outlet issued an invoice without the prescribed invoice number or QR code, with a duplicate number or counterfeit QR code, a defaced invoice, or other evidence of tampering. That information can come from:

• an invoice reported as unverified on the “Tax Asaan” application or the POS Dashboard;
• an invoice physically available or acquired through mystery shopping; or
• any other reliable source.

The Commissioner must verify the invoice through its number or QR code before declaring it unverified. Sealing is triggered where the outlet was involved in issuing unverified invoices, the store was disconnected from the FBR database for forty-eight hours, offline invoices were not entered within the next twenty-four hours, or the device did not keep a record of offline invoices. The Commissioner then seeks the Chief Commissioner’s written approval, naming the sealing team. The Chief Commissioner allows or disallows the sealing and decides whether one or more branches are sealed. Rule 150ZEO(8) adds that the premises “may be sealed on any violation made by registered person”.

Reopening (rule 150ZEQ). The Commissioner imposes the serial 24 penalty by order. A de-sealing order issues within 24 hours of payment of the penalty and any audit demand, provided the software bug has been removed. Within three working days after de-sealing, the Commissioner arranges a software audit of all POS machines in all branches and creates a demand for any under-declared sales found. If payment is not made, de-sealing is done after a month and the premises are re-sealed after fifteen days if the default continues. The outlet may appeal the penalty order.

Ground 2: a Tier-1 outlet that has not integrated

Under rule 150ZEP, an officer not below Assistant Commissioner reports the non-integration in writing to the Commissioner, recommending sealing under serial 25A. The Commissioner inquires and forwards the report with reasons to the Chief Commissioner, who issues a written order allowing or disallowing sealing.

Reopening (rule 150ZER). The Commissioner imposes the serial 25A penalty. The premises stay sealed until the penalty is paid and all POS machines in all branches or outlets are integrated. Integration is carried out in front of an FBR team that includes a technical person, and the Commissioner certifies within three days that all POS machines are integrated and free from technical and functional errors.

Worked example (illustrative figures)

Lahori Sweets is a made-up Tier-1 sweet shop with two branches in Lahore. A customer’s bill from the Liberty branch shows as unverified on Tax Asaan. The Commissioner verifies it by QR code and confirms it is not in FBR’s system. Suppose the tax on the unreported sales traced so far is Rs. 180,000.

• Serial 24 penalty: the higher of Rs. 500,000 and 200% x Rs. 180,000 = Rs. 360,000.
• Rs. 500,000 is higher, so the penalty is Rs. 500,000.

If the tax involved were Rs. 400,000, 200% x Rs. 400,000 = Rs. 800,000, which is higher than Rs. 500,000, so the penalty would be Rs. 800,000. The Chief Commissioner may limit sealing to the Liberty branch if only its invoices were unverified.

Common mistakes

• Treating a POS outage as harmless. Forty-eight hours disconnected from the FBR database is a listed trigger.
• Forgetting offline bills. Offline invoices not entered within the next twenty-four hours are also a trigger.
• Assuming non-Tier-1 food outlets fall under this chapter. Chapter XIV-AD is titled for Tier-1 retailers.

What to check in the official text

Read rules 150ZEN to 150ZER of the Sales Tax Rules as amended to 30 June 2025, and serials 24, 25 and 25A of the section 33 table in the Sales Tax Act as amended to 30 June 2026. Two cross-references in the Rules look out of date: rule 150ZEQ still requires compliance with Chapter XIV-AA, which the Rules show as omitted by S.R.O. 69(I)/2025, and rule 150ZEN refers to integration under section 3(9A), whose integration proviso the Finance Act, 2025 omitted; the duty now sits in section 23(6).