How the Pakistan sales tax calculator is verified

Inputs

Input	Field	Type
Amount (PKR)	`amount`	number
This amount is	`direction`	string
What is being supplied	`category`	string
Buyer is not registered or not on the active taxpayers’ list (4% further tax)	`unregisteredBuyer`	boolean
Goods notified under s.3(3A) — the buyer pays the tax	`reverseCharge`	boolean
Annual turnover of a manufacturer (PKR)	`annualTurnover`	number
Has an industrial gas or electricity connection	`industrialConnection`	boolean
Located in a residential area	`residentialArea`	boolean
Labour force of more than ten workers	`overTenWorkers`	boolean

The formula

Each derived value below is computed by the Valem engine from the expression shown, in this order. Nothing else runs — there is no hidden code path.

Derived value	Field	Formula (JSONata)
Rate	`rate`	`(category = 'standard' ? $const.salesTaxRate : $const.zeroRate) + ((unregisteredBuyer and category != 'export') ? $const.furtherTaxRate : 0)`
Effective Rate	`effectiveRate`	`reverseCharge ? 0 : $round(rate, 4)`
Value (excluding tax)	`netAmount`	`direction = 'remove' ? $round(amount / (1 + effectiveRate), 2) : $round(amount, 2)`
of which further tax 4%	`furtherTax`	`(unregisteredBuyer and category != 'export' and $not(reverseCharge)) ? $round(netAmount * $const.furtherTaxRate, 2) : 0`
Sales tax charged	`vatAmount`	`$round(netAmount * effectiveRate, 2)`
Sales tax paid by the buyer (s.3(3A))	`selfAssessedVat`	`reverseCharge ? $round(netAmount * (category = 'standard' ? $const.salesTaxRate : $const.zeroRate), 2) : 0`
Gross	`grossAmount`	`$round(netAmount + vatAmount, 2)`
Manufacturer must register	`mustRegister`	`$n(annualTurnover) > $const.cottageTurnoverLimit or industrialConnection or $not(residentialArea) or overTenWorkers`

Rates and thresholds

The expressions above read these as $const. They are the figures the annual refresh replaces, so they live as data rather than being written into the formulas — which is what makes a year-on-year change a one-line diff instead of an edit to arithmetic.

Constant	Value
`salesTaxRate`	0.18
`zeroRate`	0
`furtherTaxRate`	0.04
`cottageTurnoverLimit`	8000000

Test vectors (11)

Every case is executed against this model on each build, by the Java engine and independently by a JavaScript one. A mismatch of a single cent fails the build, so the page cannot ship advertising a figure the model no longer produces.

Case 1 — V1 Rs100,000 of taxable goods: 18% = Rs18,000

given `amount`	100000
given `direction`	add
given `category`	standard
given `unregisteredBuyer`	no
given `reverseCharge`	no
given `annualTurnover`	0
given `industrialConnection`	no
given `residentialArea`	yes
given `overTenWorkers`	no
expect `vatAmount`	18000
expect `grossAmount`	118000
expect `effectiveRate`	0.18

Case 2 — V2 Rs118,000 including tax back to Rs100,000

given `amount`	118000
given `direction`	remove
given `category`	standard
given `unregisteredBuyer`	no
given `reverseCharge`	no
given `annualTurnover`	0
given `industrialConnection`	no
given `residentialArea`	yes
given `overTenWorkers`	no
expect `netAmount`	100000
expect `vatAmount`	18000

Case 3 — V3 to an unregistered buyer: 18% + 4% further tax = Rs22,000

given `amount`	100000
given `direction`	add
given `category`	standard
given `unregisteredBuyer`	yes
given `reverseCharge`	no
given `annualTurnover`	0
given `industrialConnection`	no
given `residentialArea`	yes
given `overTenWorkers`	no
expect `rate`	0.22
expect `furtherTax`	4000
expect `vatAmount`	22000
expect `grossAmount`	122000

Case 4 — V4 an export is zero-rated

given `amount`	100000
given `direction`	add
given `category`	export
given `unregisteredBuyer`	no
given `reverseCharge`	no
given `annualTurnover`	0
given `industrialConnection`	no
given `residentialArea`	yes
given `overTenWorkers`	no
expect `vatAmount`	0
expect `grossAmount`	100000

Case 5 — V4b an export to an unregistered buyer abroad: no further tax

given `amount`	100000
given `direction`	add
given `category`	export
given `unregisteredBuyer`	yes
given `reverseCharge`	no
given `annualTurnover`	0
given `industrialConnection`	no
given `residentialArea`	yes
given `overTenWorkers`	no
expect `furtherTax`	0
expect `vatAmount`	0

Case 6 — V4c Fifth Schedule goods to an unregistered buyer: s.4 keeps the 4% further tax

given `amount`	100000
given `direction`	add
given `category`	fifthSchedule
given `unregisteredBuyer`	yes
given `reverseCharge`	no
given `annualTurnover`	0
given `industrialConnection`	no
given `residentialArea`	yes
given `overTenWorkers`	no
expect `rate`	0.04
expect `furtherTax`	4000
expect `vatAmount`	4000

Case 7 — V5 goods notified under s.3(3A): the seller charges none, the buyer pays Rs18,000

given `amount`	100000
given `direction`	add
given `category`	standard
given `unregisteredBuyer`	no
given `reverseCharge`	yes
given `annualTurnover`	0
given `industrialConnection`	no
given `residentialArea`	yes
given `overTenWorkers`	no
expect `vatAmount`	0
expect `grossAmount`	100000
expect `selfAssessedVat`	18000

Case 8 — V6 Rs8 million of turnover is still a cottage industry (“does not exceed”)

given `amount`	100
given `direction`	add
given `category`	standard
given `unregisteredBuyer`	no
given `reverseCharge`	no
given `annualTurnover`	8000000
given `industrialConnection`	no
given `residentialArea`	yes
given `overTenWorkers`	no
expect `mustRegister`	false

Case 9 — V7 above Rs8 million a manufacturer must register

given `amount`	100
given `direction`	add
given `category`	standard
given `unregisteredBuyer`	no
given `reverseCharge`	no
given `annualTurnover`	8000001
given `industrialConnection`	no
given `residentialArea`	yes
given `overTenWorkers`	no
expect `mustRegister`	true

Case 10 — V8 under Rs8 million but with an industrial electricity connection: not a cottage industry, must register

given `amount`	100
given `direction`	add
given `category`	standard
given `unregisteredBuyer`	no
given `reverseCharge`	no
given `annualTurnover`	1000000
given `industrialConnection`	yes
given `residentialArea`	yes
given `overTenWorkers`	no
expect `mustRegister`	true

Case 11 — V9 more than ten workers fails s.2(5AB)(c)

given `amount`	100
given `direction`	add
given `category`	standard
given `unregisteredBuyer`	no
given `reverseCharge`	no
given `annualTurnover`	1000000
given `industrialConnection`	no
given `residentialArea`	yes
given `overTenWorkers`	yes
expect `mustRegister`	true

Sources

Sales Tax Act 1990 (FBR, amended to 30 June 2026) ss.3(1), 3(1A), 4 · checked 2026-11-01
Sales Tax Act 1990 ss.2(5AB), 14: cottage industry Rs8 million, registration · checked 2026-11-01
Sales Tax Act 1990 s.3(1A): further-tax exclusions by SRO 648(I)/2013 as amended · checked 2026-11-01

Check it yourself — and reuse it

The whole model as JSON — inputs, outputs, formulas, vectors and sources in one re-runnable document.

This model is published under CC BY 4.0: use it, adapt it, build on it, with attribution. The licence covers the model — the expression of each rule and the arrangement of the catalog. The rates and thresholds are law, and nobody licenses those; the sources above are where they come from.

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