Retailers accepting debit, credit cards payment to be treated as Tier-I

Retailers accepting debit, credit cards payment to be treated as Tier-I

ISLAMABAD: The Federal Board of Revenue (FBR) will bring more retailers into sales tax ambit after the proposal made through Finance Bill, 2021 related to Tier-I retailers.

Tier-I retailers are commonly known for having huge volume sales and operating in a mall, air conditioned environment etc.

Sources in the FBR said that retailer receiving payment through debit card and debit card would also qualify for Tier-I retailers.

KPMG Taseer Hadi & Co. Chartered Accountants in its commentary on Budget 2021/2022 stated that the Section 2(43A) of Sales Tax Act, 1990 provides threshold limit and qualification criteria for tier-1 retailers.

The Finance Bill now proposes to enhance the qualification criteria of tier-1 retailers by following additions

– Retailers of furniture whose shop measures two (2) thousand square feet or more.

– Retailer operating an online market place supplying goods through e-commerce platform, whether the goods are owned by him or not.

– A retailer who has acquired point of sale for accepting payment through debit or credit cards from banking companies or any other digital payment service provider authorized by State Bank of Pakistan.

The Bill further proposes to do away with on incentive of the cash back, up to five percent of the tax involved, to customers of Tier-1 retailer who have integrated their retail outlets with the Board’s computerized system for real-time reporting of sales.

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