The Federal Board of Revenue (FBR) has mandated the installation of video surveillance systems at production lines operated by manufacturers in five specified industrial sectors, introducing a new compliance requirement aimed at electronically monitoring manufacturing activities. Under Sales Tax General Order (STGO) No. 27 of 2026, dated October 7, 2026, the tax authority has directed the covered manufacturers to install the required surveillance systems at each production line by October 15, 2026. The directive establishes a short implementation period for businesses to meet the requirements and brings production monitoring within the scope of the specified sales tax rules.
The order has been issued under Section 40C(2) of the Sales Tax Act, 1990, read together with Rules 150ZQR, 150ZQT, 150ZQU and 150ZQZE. These provisions form the legal basis cited by the FBR for introducing electronic monitoring of production through video surveillance. By requiring surveillance systems at individual production lines, the authority is seeking to strengthen oversight of manufacturing operations within the industries covered by the directive. Manufacturers falling within the specified categories will need to ensure that their production facilities meet the new requirements within the deadline established by the tax authority.
The directive covers five sectors: packaged tea, household electronics, paper and paperboard, edible oil and ghee, and leather. Businesses engaged in manufacturing activities within these categories are required to assess their production facilities and arrange the installation of the necessary video surveillance equipment. The requirement applies to each production line, meaning manufacturers must account for their individual production operations when implementing the system. The order identifies these industries as subject to the new monitoring requirement, although the information provided in the directive summary does not specify additional technical standards, equipment specifications or installation procedures.
Manufacturers have until October 15, 2026, to complete the installation of the required surveillance systems. With the deadline falling just eight days after the order’s issuance on October 7, affected businesses have a limited period to review their existing monitoring arrangements and address any gaps in compliance. Companies that already operate surveillance equipment will need to determine whether their current systems satisfy the applicable requirements, while those without suitable arrangements will need to organise installation at their production lines. The stated deadline makes timely implementation a key consideration for businesses operating across the five covered sectors.
The FBR has also warned that failure to comply with the directive could lead to penal action under the Sales Tax Act, 1990, and the applicable rules. The warning extends to obstruction or tampering involving the required surveillance arrangements, indicating that compliance involves more than simply installing the equipment. Manufacturers will need to avoid actions that interfere with the monitoring system and ensure that their arrangements remain consistent with the applicable legal requirements. The order places responsibility on the covered businesses to meet the prescribed conditions, with potential consequences for non-compliance.
The introduction of video surveillance requirements adds another compliance obligation for manufacturers operating in the specified sectors. Businesses will need to review the scope of their production lines, coordinate the installation of suitable systems and ensure that their monitoring arrangements are in place before the deadline. The measure is part of the FBR’s use of electronic production monitoring under the existing sales tax framework. For manufacturers in packaged tea, household electronics, paper and paperboard, edible oil and ghee, and leather, meeting the October 15 deadline will be essential to avoid potential penalties under the relevant legislation and rules.
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