FBR Digital Invoicing for Bakeries, Sweet Shops and Confectioners in Pakistan (2026): Exempt Bread, 10% Buns and Rusks, and 18% Cakes and Mithai
How bakeries and mithai shops issue FBR digital invoices: bread and nan exempt, buns and rusks at 10%, cakes and sweets at 18%, cafe sales, Tier-1 rules.
What this guide tells you, in plain words
This page is for bakeries, sweet shops (mithai makers), confectioners and cake shops. It explains the sales tax rate on each item you sell, how to put each item on an FBR digital invoice, and what changes if you have a cafe corner, a home kitchen or more than one branch.
The main facts are simple. All types of breads, nans and chapattis are exempt from sales tax. The rule is serial 54 of Table 2 of the Sixth Schedule (the list in the Sales Tax Act 1990 of goods with no sales tax), added by the Finance Act 2022. Sheermal, buns, rusks and vermicelli (seviyan) lost their exemption on 1 July 2024. They now carry a reduced rate of 10% under the Eighth Schedule (the list of goods taxed below the normal rate), as FBR explained in Circular 03 of 2024-25. Cakes, pastries, mithai, namkeen and other snacks carry the normal 18%. Food served by a restaurant or caterer is outside FBR sales tax under serial 53 of the same table, because your province taxes it as a service.
Under SRO 709(I)/2025 every sales tax registered person must issue invoices digitally. SRO 1852(I)/2025 of 24 September 2025 sets the phase dates. Missing your date carries a penalty that starts at Rs 1 million. A home baker who meets the four cottage industry conditions, including annual turnover of Rs 8 million or less, makes exempt supplies and stays out.
One counter, four tax treatments
1. Exempt: all types of breads, nans and chapattis, whoever bakes them and wherever they are sold. Until June 2024 the Act also had an older bread entry that taxed bread sold by Tier-1 bakeries. The Finance Act 2024 removed it and moved sheermal, buns, rusks and vermicelli to the 10% list. So serial 54, with no Tier-1 condition, is now the only bread rule. You charge no sales tax on these lines, and the input tax (the sales tax you paid on their flour and packing) cannot be claimed.
2. Reduced rate, 10%: sheermal, buns, rusks and vermicelli, Eighth Schedule items since 1 July 2024. The 10% is charged on your selling price. The schedule and serial fields must be filled, and the extra tax field must stay blank. 'Reduced-Rate Goods in FBR Digital Invoicing' explains the rate list.
3. Standard rate, 18%: everything else you make, such as cakes, pastries, donuts, own-baked biscuits, mithai, halwa, namkeen, samosas and patties sold across the counter. Packed goods with a printed price that you resell, such as branded biscuits, sugar confectionery and imported chocolates, are Third Schedule items: the tax is 18% of the printed retail price, not of your price. 'FBR STGO 08 of 2026: Printed Retail Price and Sales Tax on 56 Third Schedule Items — What Makers, Importers and Shops Must Do' lists them. 4. Cafe and dine-in: food and drinks served at tables is a restaurant service. Serial 53 keeps it out of FBR sales tax. Your provincial authority (SRB, PRA, KPRA or BRA) taxes it as a service; in Islamabad the federal services tax applies. 'FBR vs SRB, PRA, KPRA & BRA: Who Handles Service E-Invoicing in Pakistan (2026)' explains the split.
How to put each item on an FBR digital invoice
For a bread or nan line, use the exempt sale type (sandbox scenario SN006), rate Exempt and sales tax 0. Fill the Sixth Schedule table and serial FBR lists for breads; a missing schedule or serial is error 0077 or 0078. 'Zero-Rated vs Exempt Invoices in FBR Digital Invoicing' shows the steps. An exempt line still gets an IRN (Invoice Reference Number, the unique number FBR gives every invoice) and a QR code, so do not leave bread off the invoice.
For sheermal, buns, rusks or seviyan, use the reduced rate sale type (scenario SN005) and rate 10%. Fill the Eighth Schedule Table 1 and its serial, and leave the extra tax field blank, not zero, or FBR returns error 0091. For cakes, mithai and snacks use the standard 18% sale type: SN001 for a registered buyer, SN002 for a walk-in. Mark a walk-in customer as Unregistered; you do not need their NTN. Goods sold by a retailer to end consumers are excluded from further tax under SRO 648(I)/2013, so they pay the 18% only. 'Registered vs Unregistered Buyers on FBR Invoices: Registration Type, Further Tax and ATL Checks' explains the buyer fields.
For a Third Schedule pack, use the 3rd Schedule Goods sale type (SN027 for a retailer). Put the printed retail price in the retail price field and set the value field to 0. A missing retail price is error 0090; a tax that is not 18% of it is error 0102. Use the right HS code (Harmonised System code, the international product number FBR uses): heading 19.05 covers bread, pastry, cakes, biscuits and rusks, and 17.04 covers sugar confectionery. Pick a unit FBR allows for that code, or error 0099 fires. 'UoM in FBR Digital Invoicing: Picking the Right Unit of Measurement (2026)' and 'FBR Digital Invoicing Error Codes: The Complete Reference (0001–0402)' decode the rest.
Cake orders, Eid rush, bulk orders and returns
Wedding and birthday cakes are booked with an advance. Under the time of supply rule, receiving any payment starts the sale. So issue a digital invoice for the advance on the day you receive it, and a second one for the balance at delivery. 'When Must You Issue an FBR Digital Invoice? Time of Supply, Advance Payments and the Whichever-Is-Earlier Rule (2026)' has worked cases. FBR rejects an invoice dated in the future (error 0043).
Eid and wedding seasons bring bulk orders: a company ordering 500 mithai boxes, or a hotel taking bread every morning. If the buyer gives a valid NTN and is active on the ATL (Active Taxpayers List), mark the buyer as Registered. The buyer can then claim the 18% or 10% as input tax, but only if your invoice carries an IRN. Bread lines stay exempt. For a daily supply, issue one invoice per delivery, because each delivery is its own time of supply.
A stale batch sent back, or a cake order cancelled after the advance, is fixed with a credit note against the original invoice, never by deleting it. 'Debit Notes and Credit Notes in FBR Digital Invoicing' shows the steps. A wrong figure can be corrected within 72 hours under 'FBR STGO 01 of 2026: Invoice Amendment, Cancellation & the 72-Hour Rule'; after that you need the Commissioner's approval. For more than one outlet, see 'FBR Digital Invoicing for Businesses with Multiple Branches or Outlets (2026)'.
Who must integrate: Tier-1 tests, small shops and home bakers
A bakery is a Tier-1 retailer under section 2(43A) of the Sales Tax Act if any one test is met: a unit of a chain of stores; a shop in an air-conditioned mall, plaza or centre (kiosks excluded); an electricity bill above Rs 1.2 million in the last twelve months; or turnover above Rs 200 million. The turnover test was added by the Finance Act 2026 from 1 July 2026, which also removed the old card-machine test. A Tier-1 bakery must link its counter to FBR's POS system and, like every registered person, issue digital invoices. 'FBR POS Integration vs Digital Invoicing: Which One Does Your Business Need? (2026)' explains how the two fit together.
A registered bakery that is not Tier-1 still falls under SRO 1852(I)/2025. A very small single shop that sells only to walk-in customers may qualify for the Asaan Tajir fixed tax scheme under SRO 1166(I)/2026; see 'FBR Asaan Tajir App and Green Plate (2026): How Small Shopkeepers Join the 1% Fixed Tax Scheme and When Digital Invoicing Still Applies'. It is closed to Tier-1 retailers and owners of more than one shop. A home baker is a cottage industry only if all four conditions hold: no industrial gas or electricity connection, a kitchen in a residential area, ten workers or fewer, and annual turnover of Rs 8 million or less. Cottage industry supplies are exempt under serial 3 of Table 2 of the Sixth Schedule, so no digital invoice is needed. Cross any one line and the normal rules apply, starting with 'Sales Tax Registration (STRN) in Pakistan: The Step Before FBR Digital Invoicing (2026)'.
The cost of staying outside is set out in 'FBR Digital Invoicing Penalties in 2026: Fines, Deadlines and How to Stay Compliant': a first penalty of Rs 1 million, and business buyers losing their input tax on bills without an IRN. On Digi Invoice the exempt, 10% and 18% sale types, the schedule and serial fields and the blank extra tax rule are saved once per product. A nan, a rusk packet and a cake then post as one three-line invoice. The sandbox (FBR's free practice system where test invoices do not count as real) lets you rehearse an Eid order first.
Difficult words in this guide
Sixth Schedule — the list in the Sales Tax Act 1990 of goods with no sales tax. Serial 54 of Table 2 is breads, nans and chapattis; serial 53 is food served by restaurants and caterers.
Eighth Schedule — the list of goods taxed at a reduced rate instead of 18%. Sheermal, buns, rusks and vermicelli sit here at 10% since 1 July 2024.
Third Schedule — the list of goods taxed at 18% of the retail price printed on the pack, such as branded biscuits and sugar confectionery.
Tier-1 retailer — a large retailer under section 2(43A) of the Sales Tax Act (chain store, air-conditioned mall, big electricity bill or turnover above Rs 200 million) that must link its counter to FBR's POS system.
Cottage industry — a small maker that meets all four conditions in section 2(5AB), including turnover of Rs 8 million or less a year. Its supplies are exempt from sales tax.