ISLAMABAD: As many as 15,180 cash counters/POS machines of 2,616 big retailers are integrated with the Federal Board of Revenue (FBR) point of sale (POS) system. As per the FBR’s latest data, the Tier-1 retailers registered with the FBR are 2,616; branches/outlets of these retailers are 11,009 and cash counters or POS machines of retailers enrolled with the system stood at 15,180.
In the first phase, the government is committed to integrate largest 500 retailers followed by the next 500 and so on. The FBR has directed another 482 identified Tier-1 Retailers (big retailers) to integrate with the FBR’s POS system to avoid disallowance of input tax claims and creation of tax demands.
According to the FBR, the Finance Act, 2019 added sub-section (6) to section 811 of the Sales Tax Act, 1990 (“the STA, 1990”), whereby, a Tier-1 Retailer “(T-1R)” who did not integrate its retail outlet in the manner prescribed under sub-section (9A) of Section 3 of the STA, 1990, during a tax period, its adjustable tax for that period would be reduced by 15 percent. The figure of 15 percent has been raised to 60 percent vide Finance Act, 2021.
In order to operationalise this important provision of law, a system-based approach has been adopted, whereby, all T-1Rs who are liable to integrate but have not yet integrated, with effect from July-2021 (sales tax returns filed in August 2021) are to be dealt with as per the procedure laid down in STGO No 1 of 2022 issued on 3rd August 2021.
Vide the instant Sales Tax General Order, a list of 482 identified T-1Rs has been placed on the FBR’s web portal at www.fbr.gov.pk allowing them to integrate with the FBR’s system by 10th of December 2021 and the procedure of exclusion from this list of 482 identified T-1Rs shall apply as laid down in para 2 of STGO 1 of 2022 dated 3 August 2021.
Upon filing of sales tax return for the month of November 2021 for all hereby notified T-1Rs not having yet integrated, their input tax claim would be disallowed as above, without any further notice or proceedings, creating tax demand by the same amount, the FBR added.
