There are may be several reasons.
- Application not uploaded on market.
- Application on device signed with different key (it may be debug key), than application on market.
- Email registered in Market app is not in test emails list.
- Android Market application version lower than 2.3.4
You can find checklist for testing here.
List of countries is here. Pakistan is in list.
Upd: @subspider is right. Pakistan is not in list of countries available for merchants. You may buy applications and do in-app purchases, but you can't publish paid applications or applications with in-app payments.
Quote from In-App Billing Availability and Policies
In-app billing is available to developers in supported locations for merchants.
