Can FBR seal my shop over POS violations, and how is it de-sealed?

What does the law say?

The Sales Tax Act, 1990 gives the power, and the Sales Tax Rules, 2006 give the procedure. Serial 24 of the section 33 table (invoice and monitoring offences by integrated persons) and serial 25A (failure to register or integrate) each say the business premises are liable to be sealed by an officer of Inland Revenue “in the manner prescribed”. That manner is Chapter XIV-AD of the Rules, titled “Procedure for sealing and de-sealing of business premises of Tier-1 retailers”.

The chapter covers two groups:

• Integrated Tier-1 retailers who avoid reporting sales, or issue invoices without the prescribed invoice number or QR code, or with a duplicate number or counterfeit QR code. Sealing is under rule 150ZEO and de-sealing under rule 150ZEQ.
• Tier-1 retailers required to integrate who have not registered, or have registered but not integrated. Sealing is under rule 150ZEP and de-sealing under rule 150ZER.

How is an integrated retailer’s shop sealed?

Rule 150ZEO sets out the steps:

1. Information. The Commissioner may start proceedings on information that the retailer issued an invoice without the prescribed number or QR code, a duplicate number, a counterfeit QR code, a defaced invoice, or other evidence of tampering. The information can come from invoices reported unverified on Tax Asaan or the POS Dashboard, from mystery shopping, or from any other reliable source.
2. Verification. The Commissioner shall verify the invoice through its number or QR code before declaring it unverified.
3. Request for approval. Where there is evidence of unverified invoices, or the store is disconnected from the FBR database for 48 hours, or offline invoices are not entered within the next 24 hours, or the device does not keep offline records, the Commissioner seeks the written approval of the Chief Commissioner and names the sealing team.
4. Decision. The Chief Commissioner either allows or disallows sealing and, if allowed, notifies the team. He also decides whether one or more branches are sealed.
5. Record. The sealing order goes to the Member (IR-Operations) and a copy to Chief (POS).

Sub-rule (8), added in February 2025, adds that the premises “may be sealed on any violation made by registered person.” It does not define “violation”.

How is a non-integrated retailer’s shop sealed?

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 holds an inquiry and forwards the report with reasons to the Chief Commissioner, who issues a written order allowing or disallowing sealing after recording reasons.

How is the shop de-sealed?

The conditions differ by group.

	Integrated retailer (rule 150ZEQ)	Non-integrated retailer (rule 150ZER)
Penalty order	Serial 24 of section 33	Serial 25A of section 33
Condition to open	Payment of penalty and the demand created during audit; software bug removed	Payment of penalty and integration of all POS machines in all branches or outlets
Timing	De-sealing order within 24 hours of payment	Premises remain sealed until both conditions are met
After opening	Software audit of all POS machines in all branches within three working days	Commissioner certifies to the Chief Commissioner within three days that all POS machines are integrated and error-free

Rule 150ZEQ adds that the Commissioner works out the under-declared sales from the software audit and creates a demand for the tax sought to be evaded. If that is not paid, de-sealing “shall be done after a month” and the premises shall be re-sealed after fifteen days if the default continues.

Under rule 150ZER, integration is done in the presence of an FBR team that includes a technical person.

Worked example (illustrative scenario)

A Tier-1 shoe retailer in Rawalpindi, already integrated, is reported through the Tax Asaan app for an invoice that shows as unverified. The Commissioner checks the invoice number and confirms it is not in FBR’s system. He writes to the Chief Commissioner, naming a sealing team. The Chief Commissioner allows sealing of the one branch that issued the invoice, not the retailer’s other two branches.

The Commissioner then passes a penalty order under serial 24. Once the retailer pays it and the demand from the audit, and the software fault is fixed, the de-sealing order is due within 24 hours. Within three working days after opening, an integrator audits the POS machines in all three branches.

Can I appeal?

Rule 150ZEQ(iii) says the registered person may file an appeal against the order. Section 45B of the Act allows a person aggrieved by an order under section 33 to appeal to the Commissioner Inland Revenue (Appeals) within thirty days of receiving it, or directly to the Appellate Tribunal. Rule 150ZER does not mention appeal, but the penalty it relies on is also an order under section 33. Whether the sealing order itself, as distinct from the penalty order, is appealable under section 45B is not stated.

Common mistakes

• Assuming sealing is automatic. Both rules require a Chief Commissioner decision that can go either way.
• Paying the penalty but not integrating. For a non-integrated retailer, rule 150ZER needs both payment and integration of every POS machine.
• Assuming the audit demand is separate from reopening. For an integrated retailer, rule 150ZEQ ties de-sealing to payment of the penalty and the audit demand.

What to check in the official text

Read Chapter XIV-AD in the Sales Tax Rules, 2006 as amended to 30 June 2025. Rule 150ZEQ appears inside the text rather than as its own heading in our copy, so read it in the official PDF. It still refers to “Chapter XIV-AA”, which the same edition shows as omitted in January 2025; the effect of that stale reference is not settled here. Rule 150ZEP still points to an older provision of the Act whose integration proviso was omitted by the Finance Act, 2025. Check for amendments to the Rules after 30 June 2025.