ISLAMABAD: In a decisive move to combat tax evasion, the Federal Board of Revenue (FBR) has mandated continuous electronic surveillance of all sugar production, requiring mills to install and operate advanced monitoring systems before any stock can be cleared for market.
The FBR issued General Sales Tax Order (STGO) 06 of 2025 on Wednesday, titled “Electronic Monitoring of Production of Sugar Bags Through Video Analytics.”
The order bars sugar mill owners from clearing stocks from their factories until an Inland Revenue officer has monitored the commodity using the mandated digital systems. The order was issued under the powers conferred by Section 40C (2) of the Sales Tax Act, 1990. This mandates the FBR to implement electronic monitoring of production on all manufacturing sites of notified sectors. Furthermore, Rule 150ZQT (2) of the Sales Tax Rules, 2006, provides the regulatory basis for this directive. The latest STGO states that, before the commencement of the upcoming sugar crushing season, no manufacturer shall remove any production from their business premises unless it has undergone this new process of production monitoring.
To comply with the new regulations, the FBR has directed all sugar mills to procure and install specific Production Monitoring Equipment before the season begins. It stipulates that the Graphics Processing Unit (GPU) must be manufactured by NVIDIA, AMD, Intel, or Huawei and meet the desired specifications, while the Central Processing Unit (CPU) must be manufactured by either AMD or Intel and meet or exceed the target specifications. It further stipulated that all hardware installations must be placed on standard mounting racks within locked, dust-proof environmental control cabinets to ensure physical security. This equipment, the FBR directive said must seamlessly integrate with any existing monitoring hardware and enable surveillance through video analytics or ‘Digital Eye’ software as defined under the Sales Tax Rules. This measure reinforces the FBR’s strategy to enhance transparency and secure tax revenue from a key sector of the economy.