Is sales tax charged on freight in Pakistan?

If you charge the freight, then yes, in almost every case. The Sales Tax Act 1990 never names freight. Section 2(46)(a) instead defines the value of a taxable supply as "the consideration in money including all Federal and Provincial duties and taxes, if any, which the supplier receives from the recipient for that supply but excluding the amount of tax". Freight you bill to the buyer is money you receive for that supply, so it goes inside the value. The one clear exception is where the buyer hires the transporter and pays the transport company directly, so the amount never reaches you at all. Your own terms of sale usually settle it: an ex-factory price ends at your gate, while a delivered price includes the delivery.

Do I add packing and delivery charges before or after sales tax?

Before. Add them to the value first, then work out the tax on the total. Goods of Rs 100,000 with Rs 5,000 freight and Rs 2,000 packing give a value of Rs 107,000, and 18 per cent of that is Rs 19,260. Adding the charges after the tax is the most common way sellers underpay, and FBR catches it automatically. Its system recalculates the tax as value times rate divided by 100 and refuses the invoice with error 0104 when the two do not agree. Third Schedule goods are different and must not be handled this way: their tax is charged on the printed retail price, so freight and packing stay out of the tax base entirely.

Can I show freight as a separate line on an FBR digital invoice?

Yes, and it is often the clearer choice. FBR's Digital Invoicing payload has no field called freight, so you have two options. You can fold the charge into the goods line by raising valueSalesExcludingST and recalculating that line's tax. Or you can bill the charge as its own line item with its own HS code, unit of measurement and tax. Both are acceptable, and a separate line is easier for the buyer to read and for you to explain later. Whichever you choose, the declared tax must match the declared value on every line, or FBR returns error 0104 and the invoice does not post.

FBR Digital Invoicing · Guide

Freight, Delivery and Packing Charges on an FBR Invoice (2026): Do You Charge Sales Tax?

Do you charge sales tax on freight, delivery and packing? Section 2(46) of the Sales Tax Act 1990, and where these charges go on an FBR digital invoice.

What this guide tells you, in plain words

You sell goods. You also charge the buyer for delivery, packing or loading. Does sales tax apply to those charges too?

Usually, yes. The law taxes the whole amount you receive from the buyer for that sale. It does not tax only the price of the goods.

This guide shows you the rule, the one case where it does not apply, and exactly where the charge goes on an FBR digital invoice.

The rule in one line

The Sales Tax Act 1990 never uses the word freight. It defines something wider instead, called "value of supply".

Section 2(46)(a) says the value of a taxable supply is "the consideration in money including all Federal and Provincial duties and taxes, if any, which the supplier receives from the recipient for that supply but excluding the amount of tax".

Read that slowly. Two phrases do all the work.

"Consideration in money" means everything the buyer pays you. "For that supply" means it has to be part of the same sale.

So the test is not the name written on the line. The test is simpler than that. Is the buyer paying you this money because of the goods?

If the answer is yes, the money belongs inside the taxable value. Writing it on a separate line called freight does not move it outside.

The section takes out one thing only — the sales tax itself. No other charge is carved out by name.

Charges that normally sit inside the value

These are charges you raise yourself, on your own bill, as part of the same deal.

Delivery or freight, when you deliver the goods and bill the buyer for it.

Packing and crating, including cartons, drums, pallets and wrapping.

Loading, unloading and handling labour.

Installation, fitting or commissioning that you do after delivery.

Your own commission, service charge or documentation fee.

A fuel surcharge or delivery surcharge added at the bottom of the bill.

Here is a plain example. Goods are Rs 100,000. Freight is Rs 5,000. Packing is Rs 2,000.

Your taxable value is Rs 107,000, not Rs 100,000. At 18 per cent the tax is Rs 19,260, not Rs 18,000.

That Rs 1,260 gap is small on one invoice. Across a year of deliveries it is the kind of short payment an audit finds easily.

Discounts work the other way, and they have their own condition. Section 2(46)(b) allows you to tax "the discounted price excluding the amount of tax; provided the tax invoice shows the discounted price and the related tax and the discount allowed is in conformity with the normal business practices". 'How to Show a Discount on an FBR Digital Invoice (Trade Discount, Bonus Packs and Free Goods)' covers how to put that on the invoice.

When the transport charge is not yours to tax

There is one clean case. It turns on a single question — who hired the transporter?

Say the buyer arranges their own truck and pays the transport company directly. You never bill that amount. Then it is not consideration you received, so it sits outside your value of supply.

Watch the words on your own paperwork, because they decide this. "Ex-factory" or "ex-godown" means the buyer takes over at your gate. "Delivered" or "free on road" means you are delivering, so the cost is part of your price.

Now the middle case, which is where most disputes start. You pay the transporter, then add the same amount to your invoice. Many sellers call this a reimbursement and leave it untaxed.

Be careful here. If your contract says you must deliver the goods, you are recovering your own cost of selling. That money is still paid to you for the supply.

The Act gives no exemption to a charge just because you labelled it a reimbursement. If your case really is a pure pass-through, keep the transporter's bill in the buyer's name. Then take written advice before you leave the amount out.

Something else is coming for anyone moving goods by road. FBR's e-Bilty system will tie the consignment note to the invoice. 'e-Bilty in Pakistan (2026): How FBR Will Link Your Sales Tax Invoice to the Truck' explains it.

If transport is your actual business, not an add-on, read 'FBR Digital Invoicing for Courier, Cargo & Logistics Companies (2026)' instead. A carrier's rules are not a seller's rules.

Where the charge goes on the digital invoice

Now the practical part. FBR's Digital Invoicing payload (the block of data your software sends) has no field called freight. Go through the item fields and you will not find one.

So there are only two correct ways to show the charge.

The first is to fold it into the goods line. Raise valueSalesExcludingST (the sale value before sales tax) on that line, then work the tax out again on the new figure.

The second is to bill it as its own line, with its own HS code, its own unit of measurement and its own tax. 'UoM in FBR Digital Invoicing: Picking the Right Unit of Measurement (2026)' helps you pick a unit FBR will accept for that line.

Either way, one rule cannot be bent. Whatever value you declare, the tax has to match it.

FBR works out the tax itself as value times rate divided by 100. If your figure is different, the invoice is refused with error 0104. 'How Sales Tax Is Calculated on an FBR Digital Invoice: The Formulas FBR Actually Validates' sets out each formula. 'FBR Digital Invoicing Error Codes: The Complete Reference (0001–0402)' lists what every code means.

The commonest mistake is exactly this one. The seller adds freight to the value but leaves the tax at the old amount. FBR answers 0104 and the invoice never posts.

Third Schedule goods are the big exception, and getting this wrong is expensive. Their tax is charged on the printed retail price, not on what you charge the buyer. So freight must stay out of that base. FBR checks the retail-price sum separately and refuses a mismatch with error 0102. 'Third Schedule Goods Under FBR in 2026: New Categories, Footwear and Retail Price Rules' shows which goods this covers.

Two smaller points finish the picture. Further tax on a sale to an unregistered buyer uses the same value, so adding freight raises that too. And if your rate is not 18 per cent, you must still fill in the SRO Schedule No. and Item Serial No. 'SRO Schedule No. and Item Serial No. on an FBR Invoice: What to Fill and Where to Find It (2026)' tells you where to look them up.

Selling online adds one more layer. Under section 3(7A) a courier or a bank may deduct 2 per cent when it collects the money for you. 'Sales Tax on Online Orders in Pakistan (2026): The 2% Courier and Bank Deduction Explained' covers it.

Still billing by hand? Create a free account and post one test invoice in FBR's sandbox before you go live. The tax then recalculates itself every time a charge changes.

Difficult words in this guide

Value of supply: the total amount the law counts as your sale price when working out sales tax.

Consideration: everything the buyer pays you, in money, for the sale.

Ex-factory: a price that ends at your own gate, where the buyer takes over the transport.

valueSalesExcludingST: the field in FBR's data block that holds your sale value before sales tax is added.

Error 0104: FBR's reply when the tax you declared does not match the value times the rate.

Third Schedule: a list of goods where sales tax is charged on the printed retail price instead of your invoice price.