FBR Launches Online Auctions With Rs25,000 Entry Fee

ISLAMABAD: The Federal Board of Revenue (FBR) has rolled out an electronic auction mechanism for selling seized and confiscated goods, setting a minimum one-time registration fee of Rs25,000 for bidders and allowing a 72-hour online bidding window under revised Sales Tax Rules, 2006.

Through SRO 1889(I)/2026, issued on October 22, the FBR has added a new chapter to the rules under sections 50 and 40F of the Sales Tax Act, 1990. The amendments establish procedures covering online registration, valuation, bidding, payment and the delivery of auctioned items.

Under the new system, individuals with a valid Computerised National Identity Card (CNIC) or National Identity Card for Overseas Pakistanis (NICOP) can register through the FBR's electronic auction platform by paying a one-time fee of at least Rs25,000. Approved applicants will receive a unique identification number, with registration confirmation sent to their registered email address or mobile number.

Authorised officers may verify the information provided and reject applications on legitimate grounds, provided the reasons are documented in writing. These grounds may include failure to comply with relevant procurement rules.

The platform will cover confiscated goods as well as seized items cleared for disposal through an adjudication order. Custodians will be required to upload inventories, photographs and supporting records, ensure the goods remain secure and arrange inspections for interested bidders.

Before proceedings begin, the authorised officer must confirm that the goods can legally be sold, checking for court-imposed stay orders, available release or redemption options and any other applicable restrictions. Items covered by a judicial stay cannot be auctioned until the order expires or is withdrawn.

Reserve prices will be set on the recommendation of a valuation committee comprising an additional commissioner, deputy commissioner and assistant commissioner of Inland Revenue. The committee may seek assistance from technical or valuation specialists where necessary.

The valuation process will consider the goods' age, physical condition and remaining shelf life. Depending on the circumstances, the committee may use declared sales tax invoice prices from the previous three tax periods, printed retail prices, customs-assessed values or prevailing market quotations.

If a lot fails to sell in three consecutive auctions, the committee may lower its reserve price in increments of up to 10% of the reference reserve price at a time.

Auction announcements will be published on the electronic platform, outlining the goods available, reserve prices, inspection arrangements, applicable taxes and duties, bidding requirements and delivery conditions.

Online bidding will remain open for 72 hours after the first bid is received. The system will automatically display the highest valid offer and record every bid alongside its date, time and bidder identification details.

After the bidding window closes, the authorised officer will process the highest offers for approval or rejection. The highest qualifying bid must be accepted within 72 hours of the closing of the bidding period.

As a general rule, successful offers must meet or exceed the reserve price. However, the Commissioner Inland Revenue may approve an offer equal to at least 80% of the reserve price after assessing the goods' condition and remaining shelf life.

Successful bidders must pay the full accepted amount, along with all applicable taxes, duties, fees and other charges, within seven days of receiving electronic notification that their bid has been accepted. Payments will be made through electronically generated challans and designated payment channels.

The goods will only be released after the authorities receive and verify the complete payment. An electronic release order will then be issued to the custodian.

If a successful bidder fails to pay, the authorities may cancel the sale, confiscate the bid security, approach the next-highest valid bidder or put the goods up for auction again. Defaulters may also be barred from future auctions for up to six months, or for a period prescribed by the relevant procurement rules, after being given an opportunity to present their case.

The notification also authorises the Commissioner Inland Revenue to cancel, suspend or withdraw auction proceedings, disqualify bidders and recover goods even after delivery if fraud, misrepresentation or revenue loss is established.

Arms and ammunition, narcotics, counterfeit products and other prohibited materials will generally remain excluded from auctions unless the FBR issues specific directions allowing their disposal.

Auction proceeds will first cover lawful expenses associated with the sale. The remaining amount will be applied towards relevant taxes, duties, penalties, surcharges and government dues. Any balance payable to the original owner will be dealt with under section 40F of the Sales Tax Act, 1990.