KARACHI: Federal Board of Revenue (FBR) issues warning to retailers of large entities for not providing online access to sales and purchases.
In this regard, the FBR issued Sales Tax General Order (STGO) No. 07, 2023 regarding integration of retail outlets with Point of Sale (POS) system with the FBR.
The FBR said that the Finance Act, 2019 added sub-section (6) to section 88 of the Sales Tax Act, 1990 whereby a Tier-l Retailer, 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 l5 per cent. The figure of l5 per cent has been raised to 60 per cent vide Finance Act, 2021, the FBR added.
In order to operationalize this important provision of law, a system-based approach has been adopted whereby all Tier-1 Retailers, 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. I of 2022 issued on August 03, 2021.
Through the latest STGO, a list of 108 identified Tier-1 Retailers has been placed on FBR’s web portal allowing them to integrate with FBR’s system and the procedure of exclusion from this list of 108 identified Tier-1 Retailers shall apply as laid down in STGO 17 of 2022 dated May 13, 2022.
The FBR said that upon filing the Sales Tax Return for the month of January, 2023 for all hereby notified Tier-1 Retailers 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.
FBR officials said that such retailer shall face a penalty up to five hundred thousand rupees or two-hundred percent of the tax amount involved, whichever is higher. Such retailer may also to be sentenced to imprisonment which may extended to two years.