The Federal Board of Revenue (FBR) has directed registered tyre manufacturers in Pakistan to install electronic production monitoring systems by November 30, requiring real-time recording of output and transmission of production data to tax authorities.
The directive, issued through Sales Tax General Order (STGO) No. 32 of 2026 on Friday, brings the tyre industry under the FBR’s electronic monitoring regime. The system is part of the tax authority’s efforts to address a sales tax gap estimated at Rs. 3.7 trillion.
The regime already covers several sectors, including packaged tea, household electronics, paper and paperboard, edible oil and ghee, leather, textile spinning, tiles, packaged milk, juices, bottled water and aerated beverages.
FBR Sets Production Monitoring Requirements
Under the new rules, manufacturers must install prescribed hardware and software at every curing press and takeaway conveyor or finishing line to electronically record production.
The system will count each cured tyre while distinguishing actual output from dry runs, maintenance and warm-up cycles. It must also identify uncured tyres and classify finished products using approved stock keeping unit (SKU) data, including tyre diameter, width, tread design or pattern, and weight.
The FBR has authorised ISSM Labelling Solutions (Pvt) Ltd to provide electronic production monitoring systems to the industry. The vendor must ensure that production events are recorded in real time and securely transmitted to the FBR’s central control system.
The equipment must also detect and report unexpected stoppages, machinery failures, tampering, interruptions, and attempts to bypass monitoring devices.
Tyres Cannot Be Removed Without Electronic Monitoring
The monitoring system will maintain audit logs and generate production reports and analytical data to support reconciliation and enforcement under sales tax law. Registered manufacturers will be prohibited from removing tyres from their premises unless the products have undergone the prescribed electronic monitoring.
Manufacturers will also be responsible for providing the required IT infrastructure, connectivity and electricity supply, ensuring access to monitoring equipment, and paying the applicable fees and charges.
Nine Tyre Manufacturers Identified for Initial Rollout
The FBR has initially identified nine registered manufacturers for implementation: Ghandhara Tyre and Rubber Company Ltd, Service Long March Tyres Ltd, Service Tyres (Private) Ltd, Panther Tyres Ltd, Diamond Tyres Ltd, Service Industries Ltd, Ghauri Tyre and Tube (Pvt) Ltd, Crown Tyres Ltd and United Rubber (Pvt) Ltd.
However, the tax authority clarified that the list is not exhaustive. All other registered manufacturers involved in tyre production will also be required to comply with the monitoring regime.
Chief commissioners of Inland Revenue have been directed to nominate dedicated focal persons to coordinate with manufacturers, the authorised vendor, and the FBR to ensure timely installation and operationalisation.
Field formations have also been instructed to identify manufacturers missing from the initial list, ensure their inclusion in the system, and submit progress reports to the FBR, according to the STGO.
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