What the STR-7 is and is not.
The STR-7 is the standard sales tax return form used by manufacturers, wholesalers, and distributors registered under the Sales Tax Act 1990. It reports output tax (tax collected on sales), input tax (tax paid on purchases), and the net liability or refund. Retailers may use a different form (Tier-1 retailers use STR-7 with retail schedules; small retailers under the simplified scheme have their own forms). Services providers in Sindh, Punjab, KP, and Balochistan file separate provincial returns (SRB, PRA, KPRA, BRA) on their own portals.
The return is filed on FBR Iris. The deadline is the 18th of the month following the tax period. So February 2026 tax period is due by March 18, 2026, with payment by March 15. The form pulls in Annexure A (purchases), Annexure C (sales), Annexure H (zero-rated supplies), and the credit/debit notes. With FBR digital invoicing fully active, most of Annexure C now auto-populates from PRAL.
Step 1: gather the numbers before March 10.
Five inputs feed the STR-7. One: total taxable sales of the month, broken down by tax rate (17 percent standard, 0 percent zero-rated, exempt). Two: total output tax collected. Three: total purchases from registered suppliers, broken by tax rate. Four: total input tax paid on those purchases. Five: any debit or credit notes issued or received during the period. For a Karachi importer-distributor handling PKR 80 million of monthly sales, this is roughly 1,200 invoice lines and 280 purchase lines.
The data lives in your accounting system. Run a sales register filtered by tax rate, a purchase register filtered by registered suppliers, and a tax summary. Reconcile the output tax in your books to the tax collected on your invoices. A PKR 50,000 discrepancy at this stage is a red flag. Either your tax rate was wrong on one big invoice, or a credit note posted to the wrong period. Fix it now, not after submitting.
Step 2: Annexure A purchases.
Annexure A lists every purchase invoice from a registered supplier for which you intend to claim input tax. Required columns: supplier name, supplier STRN, invoice number, invoice date, HS code (where applicable), value excluding tax, sales tax amount. Iris validates each row against the supplier own STR-7 within 48 hours. If your supplier did not declare the corresponding sale, your input tax claim is held in suspense.
A Lahore steel trading firm filed Annexure A in March 2026 with PKR 14 million of input tax. Three suppliers totaling PKR 3.2 million did not file their returns. Iris held PKR 3.2 million of the firm input claim in suspense for 90 days, after which it was disallowed. Lesson: get supplier STR-7 confirmations before you file your own. Nonari can flag any purchase where the supplier ATL or STR-7 filing status is uncertain so you handle it before the deadline.
Step 3: Annexure C sales.
Annexure C lists every taxable sale for the month. For Tier-1 retailers with PRAL digital invoicing, Annexure C auto-populates from the IRN log. For non-digital sellers, you upload a CSV with: buyer name, buyer STRN (or CNIC for walk-in), invoice number, invoice date, HS code, value, tax. Reconcile the Annexure C totals to your accounting system trial balance Sales and Output Tax accounts. Differences usually mean a missing invoice, a wrong tax rate, or a credit note not posted.
For a Faisalabad textile mill issuing PKR 60 million of monthly sales, Annexure C contains around 400 invoices. If three were issued without digital invoicing (PRAL was down during a power outage), those three appear in your accounting system but not in the PRAL log. You upload them manually with a note. The journal mechanics: DR Cash or AR / CR Sales / CR Output Tax Payable. The output tax goes to the STR-7 liability.
Step 4: net liability, payment, and submission.
Net sales tax payable = output tax - input tax - carry-forward credit from prior periods. If output is PKR 10.2 million and input is PKR 8.4 million, net payable is PKR 1.8 million. Deposit this into the FBR account via any authorized bank or 1Link by the 15th of the month. Get the CPR (Computerized Payment Receipt). Enter the CPR number in the STR-7. Submit by the 18th. The system runs a final validation and either accepts (return filed) or rejects with an error.
Worked example: a Karachi pharmaceutical distributor for February 2026. Output tax PKR 12.4 million, input tax PKR 11.1 million, prior period credit PKR 200,000. Net payable PKR 1.1 million. Paid via HBL on March 13 (CPR 8743219). Filed STR-7 on March 17. Iris accepted, status changed to Filed, and the next return cycle began. Total time, with Nonari pre-filling 95 percent of the form: 22 minutes.
- Payment deadline: 15th of the following month.
- Return filing deadline: 18th of the following month.
- Default surcharge: 12 percent annualized on unpaid tax.
- Late return penalty: PKR 5,000 minimum, up to PKR 50,000.
- Persistent non-filing: STRN suspension after 3 missed months.
Refund situations: when input exceeds output.
If input tax exceeds output tax (common for exporters and zero-rated suppliers), the excess is carried forward to the next period or claimed as a refund. For exporters under Section 8B, the refund can be claimed monthly through the FASTER (Fully Automated Sales Tax E-Refund) system. For others, the refund is filed annually with audited accounts. Realistic refund processing time: 60-120 days for FASTER, 6-18 months for manual refunds.
A Sialkot leather goods exporter with PKR 4 million monthly input tax and PKR 0 output tax (all exports are zero-rated) files for a monthly FASTER refund. Required documents: STR-7, GD (goods declaration) for each export shipment, bank realization certificates (BRC) proving foreign exchange received, and the input tax invoices. Approval rate in 2026 for clean files: 91 percent within 90 days. Common rejection: BRC not matching GD value.
The four traps that trigger audits.
Trap one: input tax claimed against unregistered or blacklisted suppliers. Iris cross-checks STRNs against the live blacklist. Any claim against a blacklisted vendor is disallowed and triggers a Section 8(1)(ca) inquiry. Trap two: output tax declared lower than what PRAL shows. If your STR-7 says PKR 8 million output but PRAL has logged PKR 9.3 million of invoices under your STRN, you get a discrepancy notice within 30 days.
Trap three: input tax on capital goods claimed in full instead of 1/12th per month over the year. Trap four: zero-rated supplies declared without supporting GD or buyer details. Each of these is a multi-year audit waiting to happen. The defensive position: reconcile your books to the STR-7 every month, keep digital copies of every invoice, and let Nonari run the validation checks before you submit.