FBR identifies retailers taking undue benefits of present registration requirement

FBR identifies retailers taking undue benefits of present registration requirement

KARACHI: Federal Board of Revenue (FBR) has identified that large number of retailers are suppressing electricity consumption to avoid mandatory registration.

A tax unit in Karachi in its budget proposals for fiscal year 2019/2020, asked the FBR Headquarters to review the present regime of sales tax registration for retailers as they were taking undue advantage.

The tax unit said that presently retailers are dealt for registration under Sales Tax Special Procedure 2007, Chapter–II, Rule 4 & 6, a retailer operating as a unit of a national or international chain of stores and other retailers paying sales tax through electricity bills.

Before this, retailers were dealt for registration under Sales Tax Rule 2006, Chapter –I, Rule 4 (b) which is reproduced as under (omitted by SRO 494(I) 2015 dated 30-06-2015).

“A retailer whose value of supplies, in any period during the last twelve months exceeds five million rupees”.

At present retailers are taking benefits of this change and having turnover more than ten million are not liable to register and paying a meager amount in electric bills.

Retailers used generators, solar energy and other sources and maintain the level of electric bills not exceeding the amount of Rs 600000/- for last twelve months and through payment of 5 percent on less than Rs20,000 electricity bill and 7.5 percent on monthly bill greater than Rs.20,000.

The FBR has been urged that retailers having turnover more than ten million needs to be included in Rule 4 of Sales Tax Special Procedure 2007, Chapter –II, to enhance the net work of Sales Tax registration.