FBR Restricts Retailers from Issuing Temporary Sales Tax Invoices via POS System

FBR Restricts Retailers from Issuing Temporary Sales Tax Invoices via POS System

Karachi, December 7, 2023 – The Federal Board of Revenue (FBR) has implemented a directive preventing integrated retailers from issuing temporary sales tax invoices through the Point of Sale (POS) system.

This development comes as the FBR issued SRO 1775(I)/2023 on Thursday, amending the Sales Tax Rules, 2006.

In this latest move, the FBR introduced an amendment to sub-rule 8 of Rule 150ZEB. According to the amendment, integrated suppliers are now prohibited from issuing temporary or draft invoices through the POS system. The revenue body aims to streamline the sales tax invoicing process and enhance transparency in retail transactions.

In the case of sales returns or exchanges, the FBR mandates that a proper debit or credit note, containing the reference of the original invoice, must be issued through the system. Details of the amount refunded or additionally charged, along with the corresponding sales tax, must be clearly specified. The FBR emphasized that no sales return or exchange would be entertained without reference to the original invoice.

Another crucial amendment has been made to sub-rule 2 of Rule 150ZEB. This amendment outlines the obligations of integrated suppliers, requiring them to notify the Board through the computerized system about all their outlets, referred to as “notified outlets.” The integrated supplier must register each Point of Sale (POS) to activate the integration, providing comprehensive information including:

1. POS registration number (provided by the system)

2. Name of the business

3. Branch name

4. Branch address

5. POS identification number

6. Registration date

7. Name and NTN of the POS solution provider

8. Name and CNICs of the proprietors or directors of the solution provider, as applicable

9. Any other information required by the Board

These amendments underscore the FBR’s commitment to modernizing and streamlining tax procedures, with a particular focus on the retail sector. The prohibition on temporary sales tax invoices aims to curb potential misuse of the invoicing system and enhance the accuracy and reliability of financial transactions in the retail industry.

Retailers, especially those utilizing integrated POS systems, are urged to promptly comply with the amended rules to avoid any potential penalties or disruptions in their business operations. The FBR’s emphasis on proper documentation and adherence to the specified procedures aims to foster a more transparent and accountable business environment in Pakistan.