The Federal Board of Revenue (FBR) has introduced a new electronic scrutiny mechanism for sales tax returns, creating a computerised process through which discrepancies identified in taxpayers’ filings can be communicated online. The new system is designed to allow registered persons to review and respond to factual or legal issues detected during automated scrutiny before the tax authority moves towards formal legal or penal proceedings. The mechanism forms part of the FBR’s wider use of digital systems for tax administration and introduces a structured process for communicating potential irregularities directly through the IRIS platform.
The FBR introduced the mechanism through S.R.O. 1655 (I)/2026, issued on Saturday, September 26, under which amendments have been made to the Sales Tax Rules, 2006. The amendment adds a new Chapter XII-A to the rules, titled “Procedure for Electronic Scrutiny and Intimation of Issues Detected by the Computerised System.” Under the new chapter, the FBR’s computerised system may issue online advice or advance intimation through IRIS when it identifies mistakes, discrepancies or other issues in sales tax returns or related information submitted by registered persons.
The electronic intimation is intended to provide taxpayers with an opportunity to examine the issues identified by the system and take corrective action where necessary. Registered persons may clarify the position, rectify errors or address discrepancies before the matter progresses towards legal or penal action under the applicable tax framework. The advance intimation may also be issued by the Officer of Inland Revenue who has jurisdiction over the registered person, meaning that the process can involve both automated scrutiny and intervention by the relevant tax officer.
Under the newly introduced procedure, taxpayers will be provided at least seven days to respond to an advance intimation, rectify discrepancies or take other appropriate corrective measures. If a registered person does not respond within the prescribed period, the system will issue a reminder. The taxpayer will then receive another response period of not less than seven days. The procedure therefore establishes a defined communication and response mechanism before further action is considered by the concerned tax authorities.
The new chapter will cover automated scrutiny, analysis and cross-matching of sales tax returns with other information available to the FBR concerning registered persons. This means the computerised system can examine information contained in returns alongside other available data to identify inconsistencies or potential discrepancies. The mechanism is intended to support the FBR’s electronic approach to tax administration by moving the initial identification and communication of certain issues into a computerised environment rather than relying solely on conventional manual scrutiny.
The FBR has also established a digital record-keeping process under the new mechanism. Details of discrepancies detected through the system, electronic intimations issued to taxpayers and responses received from registered persons will be communicated to the relevant Inland Revenue officer. These records will also be maintained on the system dashboard, allowing the concerned officer to review the history of the scrutiny process and the taxpayer’s response. The automated scrutiny and electronic communication process will be implemented through Change Request Forms (CRF).
After receiving and reviewing a taxpayer’s response, the concerned Inland Revenue officer will examine the information and determine what action, if any, is required under the applicable law. Any subsequent action will be taken under the relevant provisions of the Sales Tax Act, 1990, and the rules made under it. The introduction of the electronic scrutiny procedure therefore establishes a formal digital channel for identifying sales tax discrepancies, notifying registered persons, recording their responses and enabling the relevant tax officer to proceed according to the existing legal framework where further action is considered necessary.
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