LAHORE: The Federal Board of Revenue (FBR) has been asked to ensure its new electronic monitoring drive for packaged juices does not end up burdening only compliant companies while leaving undocumented producers outside the tax net.
The concern was raised by the formal beverage industry, asking whether Sales Tax General Order No 04 of 2026 will apply to all juice manufacturers, including small, toll and unregistered units, or only to large documented players. It also sought clarity on how the FBR plans to bring “mushroom” operators into the system and prevent selective enforcement.
Industry sources say all compliant juice manufacturers are already implementing the new order. But they warn that if enforcement remains limited to the formal sector, it will increase costs for registered companies while giving unregistered operators room to undercut prices and evade taxes.
The industry is responding to the drive launched by the FBR regarding the launch of an electronic production monitoring regime for aerated waters and beverages under STGO 07/2026. The order has made it mandatory for all registered beverage manufacturers, including toll manufacturers, to install real-time monitoring systems. The required setup includes barcode scanners, counting sensors, IP cameras, PLCs, HMIs and software linked directly to the FBR’s central platform.
The goal, according to the FBR, is to improve transparency, reduce under-reporting and strengthen revenue collection by tracking production in real time. Chief commissioners inland revenue have been directed to appoint focal persons to coordinate with manufacturers and approved vendors.
Real-time data can help the FBR cross-check production volumes and detect irregularities. However, the current challenge in the juice sector is that a large segment operates without registration with federal or provincial food authorities and does not pay sales tax or federal excise.
The formal beverages sector raised questions about the timeline for a nationwide rollout; mechanisms to bring undocumented units into the monitoring net; and steps to ensure manufacturers, packers and toll producers face the same standards. It also asked if the FBR has an estimate of revenue leakage from undocumented producers, and what penalties will apply to those operating outside the system.
Perhaps most importantly, the industry has asked for a formal consultation mechanism so that implementation is practical and does not disrupt compliant businesses. Insiders acknowledge the risk of uneven enforcement. If monitoring is applied only to documented companies, it could create what the industry calls “an additional compliance burden” while informal players continue to sell cheaper, untaxed and often substandard products. That not only causes financial distress to compliant firms but also raises public health concerns.
While the FBR says its broader digitisation strategy aims to document key sectors and reduce leakages, for juices, the test will be coverage. Bringing small and toll manufacturers under the same system will require tracking machines in unregistered facilities, linking data to sales and consistent penalties for violations. Without that, the new system may end up documenting the documented, while the undocumented continue to operate in the shadows.
