The All Pakistan Textile Mills Association (APTMA) has urged the Federal Board of Revenue (FBR) to revise proposed changes to sales tax penalties in the Finance Bill 2026, warning that compliant buyers could be held responsible for misconduct committed by their suppliers.

In a letter to FBR Chairman Rashid Mahmood Langrial, APTMA said it supports efforts to curb fake invoicing and tax fraud but objected to proposed amendments in Section 33 of the Sales Tax Act, 1990, particularly Serial Nos. 30 and 31.

The association argued that the new provisions could require buyers to reverse input tax claims, pay surcharges, and face penalties if suppliers fail to declare output tax or are later flagged as fake invoice issuers—even when transactions were made in good faith through FBR’s own verification systems.

APTMA warned that businesses handling large volumes of transactions would be unable to continuously track the future tax compliance status of hundreds of suppliers after purchases are completed.

It said the proposed framework could raise compliance costs, create legal uncertainty, disrupt supply chains, and trigger unnecessary litigation across the industry.

The textile body has called for safeguards to protect bona fide taxpayers, recommending amendments to Serial No. 30 and the withdrawal of Serial No. 31 in its current form. It stressed that penalties should only apply where fraud, collusion, or intentional tax evasion is clearly proven.