Islamabad, February 17, 2025 – The Federal Board of Revenue (FBR) on Monday introduced stricter rules regarding the Point of Sale (POS) integration for Tier-1 retailers.
The move, announced through SRO 164(I)/2025, amends the Sales Tax Rules, 2006, and aims to enhance transparency and compliance in the retail sector.
Under the revised regulations, the FBR will now have the authority to seal the outlets of Tier-1 retailers found issuing unverified invoices or disconnecting from the FBR database for more than 48 hours. Additionally, retailers must ensure that invoices generated during any offline period are recorded within 24 hours of reconnection. Failure to maintain proper invoice records during offline periods will also result in the sealing of business premises.
Previously, FBR officials were restricted to sealing outlets only if three unverified invoices were issued in a single day or five within a seven-day period for a single Sales Tax Registration Number (STRN). The new rules significantly lower the threshold, reflecting the FBR’s commitment to curbing tax evasion and promoting accurate sales reporting.
The FBR has also outlined a clear procedure for de-sealing sealed premises. The steps include:
1. Imposition of Penalty: The Commissioner Inland Revenue will impose a penalty under Serial No. 24 of Section 33 of the Sales Tax Act.
2. Issuance of De-sealing Order: Upon payment of the penalty and resolution of technical issues, the Commissioner will issue a de-sealing order within 24 hours.
3. Right to Appeal: Retailers retain the right to appeal against the penalty order.
4. Software Audit: An integrator will conduct a software audit of all POS machines within three working days of de-sealing.
5. Tax Assessment: The Commissioner will determine the amount of tax evaded, if any, based on the audit findings.
6. Re-sealing for Non-payment: If the tax demand remains unpaid, the premises will be re-sealed after 15 days and will not be reopened for at least a month.
The FBR’s decision to tighten POS regulations underscores its ongoing efforts to strengthen the tax collection framework and prevent revenue losses due to fraudulent invoicing practices. The amendments emphasize the critical role of technology in modernizing tax administration and ensuring compliance across the retail industry.