Author: Faisal Shahnawaz

KARACHI: Karachi Tax Bar Association (KTBA) on Friday suggested measures for successful integration of Point of Sales (POS). One of the suggestions included that the Federal Board of Revenue (FBR) should launch a mass scale awareness program for integration in order to avoid resistance from the business community.

KTBA President Muhammad Zeeshan Merchant said that the ongoing enforcement for the installation of POS would result in resistance as retailers were not aware whether they were liable to integrate or not under the law.

The KTBA President highlighted the problems of lack of information regarding POS installation at a meeting with a team of officers from the Large Taxpayers Office (LTO) Karachi.

Zeeshan Merchant reiterated that the KTBA fully supports the FBRs stance on POS, being a noble cause for the documentation of the economy and further explained the problems faced by the businessmen in the implementation of POS.

Merchant said that the STGOs of Tier-1 Retailers issued by the FBR in the case of small traders is unjustified wherein even small shop holders are also included and the FBR has only fixed the criteria of turnover to implementing the POS.

FBR needs to launch a large-scale campaign for educating Tier-1 Retailers and the general masses regarding the usefulness of bringing Tier-1 Retailers on POS. In this regard, the president of KTBA has given the following suggestions:

— A unified comittee to the extent of all field offices within Karachi must be constituted to discuss POS issues and solutions at one forum. Discussion on weekly basis must be encouraged and business representatives may also be invited in this forum.

— Joint seminars having officers from FBR, members of KTBA and representatives of various business organizations must be arranged to address the issues and fears of the business committee being faced in the implementation of POS. This would vanish the resistance and pave a long way for POS. ADCR must be kept active to resolve issues like POS. This would be a harbinger of success, provided there is a positive approach all around.

— FBR should take penal actions only to the extent of clear cases falling in the definition of Tier-1 Retailers.

— Retailers are the affected ones for the reason that manufacturers hesitate giving invoices for their purchases, whereas wholesalers and distributors are found nowhere in this chain of POS. If there is no input tax available to them then how would they pay the output tax.

— To implement POS, media campaign in the form of electronic media, social media, affixing of flyers at common places must be ensured to create awareness among the masses.

— Reasonable time of four months must be given for implementation of POS to the business committee.

— One of the fears of the POS liable retailers is that their sale will reach climax due to the implementation of POS and the department would take action against them for the previous five years as well. FBR has to take a policy decisions in this regard to address their genuine fear as to implement POS, the government has to look forward and not backward to move on in the right direction.

— Service sector needs to be addressed as SRB is also pursuing integration on POS. The retailers, restaurants are therefore in confusion about whom to report in this regard.

— SRO 779(1)/2020 dated 26.08.2020 needs a Tier-1 Retailer to be a registered person with Sales Tax meaning thereby a taxpayer has to get itself registered in Sales Tax first to implement SRO 779(1)/2020.

— POS-related expenses are one of the concerns of the small traders.

— Companies providing POS machines licensed by the Board are creating issues for the retailers. Government / FBR run POS machines must be provided to avoid such issues.

— It was also suggested that those who are integrated POS should automatically be excluded from the purview of section 8B of the Sales Tax Act, 1990 as prescribed vide SRO 344(I)/2020 dated 29.04.2020.

— Taxpayers using debit / credit card machines in the past were encouraged to use to bring the economy under documentation and now the same channel is being used to bring them under Tier-1 Retailers by bringing them in the definition of Tier-1 Retailer. This creates agony among the already documented sector and businessmen are now trying to stop using this important tool of documentation anymore.

— Department must show grace in granting extension in the filing of Sales Tax Return of those taxpayers who have been integrated with POS and are now facing problem in their filing of ST return.

— In order to achieve success in the POS implementation exercise, sector-wise profiling is recommended including plastic, paper and steel sectors by virtue of which big distributors and wholesalers would come under control thereby reducing the burden on other tiers of the economy.

— In the last, the success of POS exercise depends upon efficient control on manufacturers and importers.

The meeting was conducted at LTO, Karachi and attended by: Nisar Ahmed Burki, Additional Commissioner Inland Revenue; Mukhtiar Ahmed Shar, Additional Commissioner Inland Revenue; Anees Ahmed Memon, Deputy Commissioner Inland Revenue; Khush Ahmed Din, Senior Auditor.

Besides KTBA President Muhammad Zeeshan Merchant, the other members were also at the meeting, who are included: SyedFaiq Raza, General Secretary; Mehmood Bikiya, Vice President; HarisTufail, Joint Secretary; Shiraz Khan, Librarian; and Irfan Ghafoor, Member Admin.

FBR imposes service charges on POS invoices