The FBR strongly rebutted the malicious disinformation campaign being spread on social media against the proposed Service Charge of Re1 to be collected on all invoices issued by Tier-1 Retailers integrated with FBR’s electronic system of real-time reporting of sales.
It is being insinuated as if the rate of the Service Charge is 1 percent instead of Rupee 1 per invoice only. “This is completely baseless and untrue.”
The nominal Service Charge @ Re. 1 per invoice of whatever denomination, would be collected under section 76 of the Sales Tax Act, 1990, and utilized to promote the integration of all Tier-1 Retailers, launch publicity campaign, and finance a special prize scheme for all customers who duly verify their invoices to determine the validity and genuineness of the invoices issued by the integrated Tier-1 Retailers, FBR added.
The malicious campaign appears to have been initiated by the vested interests who oppose POS integration, and those who continue to collect Sales Tax from the general public but do not deposit it with the Government Treasury.
FBR has re-affirmed its resolve to continue integrating Tier-1 Retailers across the country with vigor.
The FBR issued SRO 1063(I)/2021 to amend Sales Tax Rules, 2006. Through the rules, the FBR established IREN and authorized the body to check and verify any of the eventualities.
Besides, the FBR also issued a procedure for companies installing Point of Sales (POSs) at the outlets of Tier-1 retailers.
Following is the text of rules issued by the FBR:
CHAPTER XIV-BB
INTEGRATION OF TIER-I RETAILERS AND LICENSING THEREOF
150ZQZH. Licensing.— (1) No person shall carry out integration of the retailers through software unless he has obtained a licence under these rules.
(2) No licensee under these rules shall maintain or operate system or provide any other service, which is not authorized under these rules.
(3) Every payment counter whether fixed or portable and generates invoices for receipt of payment either in cash or through debit or credit card shall be connected as per rule 150ZEB.
(4) Every licensee shall be bound to integrate the payment counter in the manner as prescribed under sub rule (4), (5),(16) and (17) of rule 150ZEB.
150ZQZI. Functions of the licensing committee.— (1) The licensing committee shall function in accordance with the provisions of these rules or any other instructions, procedures, issued by the Board.
(2) Project Director Retail Monitoring Cell shall be the convener of the licensing committee located at FBR House, Islamabad. The Board shall provide secretarial and other allied support for functioning of the licensing committee.
150ZQZJ. Application for grant of licence.— (1) An application for installation, configuration and integration of point of sale (POS) machine shall be made in duplicate to the Board.
(2) No application under sub-rule (1) shall be considered, unless it is accompanied by —
(I) registration certificate issued by Pakistan Software Houses Association or Institute of Chartered Accountants of Pakistan;
(ii) audited statement of accounts for the last three financial years;
(iii) list of major clientele;
(iv) incorporation certificate under the Companies Act;
(v) National Tax Number (NTN) Certificate;
(vi) the paid up capital for the latest financial year is at least Rs.100 million or above;
(vii) registration with Sales Tax Department if required;
(viii) Computerized National Identity Cards (CNICs) of directors of the incorporated company;
(ix) undertaking that the company has never been blacklisted by any Government or Provincial department or organization and has not been involved in confirmed cases of fiscal fraud;
(x) list of projects executed in the last three years;
(xi) and any other documents required through instructions orders issued by the Board.
150ZQZK. Procedure for grant of licence.— (1) On receipt of application for grant of licence in the Board, the licensing committee shall scrutinize the document provided and it shall evaluate the eligibility of the applicant within seven days of receipt of application.
(2) The licensing committee may also carry out visits, if necessary for physical inspection to ascertain the eligibility of the applicant for licensing under these rules.
(3) The licensing committee shall send its recommendations to the Member (IR — Operations) and the Director General Retail within ten days of date of submission of the application, specifying reasons for recommending or rejection of any application under these rules.
(4) In case, the companies meet the criteria under these rules, the licensing committee shall make recommendations for grant of licences.
(5) The licensing committee shall grant the licence to the recommended companies with the prior approval of Member (IR — Operations) and Director General Retail.
150ZQZL. Right granted to the licensee.— (1) A licensee shall have the right to install, configure, integrate, operate and maintain the point of sale on real time basis in accordance with conditions of the licence issued to him.
(2)The licence granted under these rules shall be subject to provisions of the Act and shall be valid for five years from date of issuance.
(3) The licence granted under these rules shall be non-transferable and shall not be allowed to be use by any sub-contractor.
150ZQZM. Renewal of licence.— (1) The application for renewal of licence shall be made to the Board three months before its expiry.
(2) The licensing committee shall evaluate the application and make recommendations to the Member (IR — Operations) and Director General Retail for renewal of licence.
(3) The licensee shall be required to comply with all the provisions of these rules for the renewal period.
150ZQZN. Technical support.— (1)The licensee shall be responsible for post deployment maintenance of Point of Sale as detailed below:
(a) setting up and maintenance of all information technology equipment connected to point of sales; and
(b) the licensee shall be authorized to,
(i) upgrade of the system hardware and software;
(ii) all bug fixes; and
(iii) immediate response to troubleshooting of any post deployment problems for uninterrupted working of the system.
(2) The licensee shall be responsible for safe and secure capture of real-time transmission of sales data from the retails outlet to FBR database at all times.
150ZQZ0. Responsibilities of the Project Director.— The Project Director shall be responsible for overall supervision of the system and the steps taken to address problems encountered during the operation of the systems.
150ZQZP. Procedure for cancellation or termination of licence.— (1) The Project Director shall immediately refer the matter to the licensing committee for further action under these rules, if he, as a result of supervision of the system or on receipt of a report from any of the Commissioners Inland Revenue or on a valid complaint, has reasons to believe that the licensee has-
(a) failed to provide the required services to the satisfaction of the Board authorities;
(b) contravened any condition of the licence;
(c) contravened any provision of these rules or the Act; or
(d) violated any applicable law while carrying out activities of licence under these rules.
(2) On receipt of reference from the Project Director under sub-rule (1), the licensing committee shall cause to serve a notice upon the licensee within fifteen days of receipt of reference, to show cause within thirty days after the date of the notice, as to why the licence issued under these rules should not be cancelled or terminated:
Provided that in cases where the Licensing, on the basis of material evidence, is of the opinion that there exits Prima facie a sufficient case against the licensee, it may suspend the licence to safeguard public finances and to prevent any other serious damage.
(3) The licensing committee may, after giving the licensee adequate opportunity of being heard and after examination of the record, cancel or terminate the licence issued under these rules.
(4) In case of cancellation of licence under these rules, the affected person or company shall have the right to file representation against the order of the licensing committee before the Board.
(5) The Board shall decide the representation after giving proper opportunity of being heard and the decision of the Board shall be final.
150ZQZQ. Fee and Charges.— (1) The licensee shall charge the fee for configuration and integration of point of sales from the retailers.
(2) No fee shall be charged from any of the field formation of the Board.
150ZQZR. Responsibilities of the Tier-I retailers.— The Tier-I retailer shall —
(a) make all payment counters comprising of point of sale at each out let, available for installation of the systems;
(b) be responsible for smooth functioning of point of sales;
(c) report to the Board and the concerned Commissioner Inland Revenue within twenty four hours of any operational failure, damage disruptions or tampering of the system; or
(d) report any inoperative point of sale to the Commissioner Inland Revenue holding the jurisdiction.
150ZQZS. Functions of Commissioner Inland Revenue.— (1) The Commissioner having jurisdiction, shall monitor proper and uninterrupted operation of the system through periodic visits by an officer of Inland Revenue authorized in this behalf.
(2) Where a Tier-I retailer does not account for sales without generating an invoice countering QR code or FBR invoice number, the Commissioner shall compute the taxes on such goods relating to unaccounted invoices, and recover the same under the relevant provisions of law.
150ZQZT. Establishment of Inland Revenue enforcement network.— The Board shall establish Inland Revenue enforcement network which shall be responsible for combating evasion and leakage of taxes payable on goods by way of co-coordinating with enforcement units of the concerned filed formations.
150ZQZU. Functioning of IR enforcement network.— To check and verify any of the eventualities, the enforcement squads of Inland Revenue shall petrol the outlets, verify the invoices and report such invoices to Commissioner Inland Revenue on which due taxes have not been paid. The Commissioner, after receipt of report from enforcement network, shall recover the tax in accordance to the provisions of the Act.
The FBR issued SRO 1005(I)/2021 for launching the prize scheme for customers of tier-1 retailers, who have integrated their retail outlets with the FBR computerized system for real-time reporting of sales and mystery shopping in respect of verification of invoices from such retailers.
The customers of integrated tier-1 retailer, whose names and CNICs are notified through random computerized draw shall be entitled to prizes in respect of their purchases from the integrated tier-1 retailers.
The customers shall verify the electronically generated invoice of integrated retailers either through “tax asaan” application or by sending sms to number 9966.
The application shall notify the customer regarding the status of invoice either as “verified” or “unverified”.
In case of verified invoice, the customer shall furnish one time, the following detail to the online system, namely: Name; CNIC; and Mobile number
Names and CNICs of the customers shall be included in the random computerized draw upon fulfillment of the requirement.
In case of unverified invoice, the customer shall report the same through system. The Board shall conduct enquiry and take appropriate action under the relevant provisions of law.
The computerized draw for the prizes shall be held in the first week of every month starting from the month of August, 2021 at the FBR Headquarters and the invoices of the immediately preceding month shall be entered in the draw.
Draw winners shall be required to perform biometric verification, at the nearest e-sahulat facility of NADRA and submit scanned copy on “tax assan” application. After successful biometric verification, winners shall be required to provide their IBAN through “tax asaan” application.
The total prize money and the denomination of the prizes shall be decided on month to month basis by the Board.
Procedure for mystery shopping.—
Mystery shopping shall be conducted by a person or the firm, duly authorized by the Board.
The person or firm authorized by the Board under sub-rule (1), shall carry out mystery shopping on random basis from tier-1 retailers.
The person or firm authorized by the Board under sub-rule (1), shall verify the invoices from the online system of FBR and in case of fake or invalid invoice, report the matter to the Board for necessary action as per relevant provisions of the Act and the rules thereunder.
Any other person may, in case of fake or invalid invoice, report the matter to the Board for necessary action as per relevant provisions of the Act and the rules thereunder.
The informer may claim reward on the basis of the detection and recovery made in consequence of fake or invalid invoice in terms of provisions of section 720 of the Act.
ISLAMABAD: Finance Minister Shaukat Tarin on Monday reiterated the government’s resolve to take stern action against tax evaders, who are not willing to be part of the tax net.
The finance minister said this while chairing a steering meeting to review progress on broadening of tax base and integration of retailers into Point of Sales (POS) system by the Federal Board of Revenue (FBR).
Tarin stated that the government had incentivized the retailers by giving tax credit on electronic cash registers during the new Budget 2021-2022.
The underlying rationale is to give incentives to the tax payers in order to broaden the tax base and at the same time, reiterated to take stern action against tax evaders who are not willing to be part of the tax net.
In the beginning, Member (IT), FBR briefed the participants about operational Terms of Reference (TORs) for integration of retailers into the POS system.
The TORs have been formulated in consultation with key stakeholders including representatives from the private sector to have a proper system of check and balance in place, he added.
While reviewing the progress of the Steering Committee, the Finance Minister stated that limited tax base is one of the key challenges and the Government is firmly committed to expand the tax base to enhance revenues exponentially.
He commended the efforts made by the members of the steering committee on the occasion.
In his concluding remarks, the Finance Minister urged FBR to strictly adhere to timelines and benchmarks and follow-up the whole exercise for broadening tax base on regular basis.
The way forward requires use of new technologies, analytical tools and end-to-end automation to broaden the tax base by integrating all the chains/outlets into MIS system by FBR.
The minister further directed to gather data by undertaking interim measures such as Mystery Shopping exercise to identify anomalies as well as adding new entrants into the system to yield efficient results.
ISLAMABAD: Minister for Finance and Revenue Shaukat Tarin on Tuesday directed the tax authorities to ensure effective tracking progress of installed Point of Sale (POS) machines and provide post deployment support to the retailers.
He further directed to determine the total volume of sales by retailers to effectively tap the revenue generation through POS system after adjustment of input and output taxes. He directed to establish a cell at FBR HQ to fast track the progress on POS integration.
Minister for Finance & Revenue Shaukat Fayaz Ahmed Tarin visited FBR Headquarters on Tuesday and held a meeting with FBR officers.
The agenda of the meeting was to devise a strategy to increase integration of retailers with the Point of Sales System of FBR.
The meeting also discussed the way forward to bring identified potential taxpayers into tax net. Special Assistant to the Prime Minister on Finance & Revenue Dr. Waqar Masood Khan and Chairman FBR Asim Ahmad along with other members of FBR were present in the meeting.
Chairman FBR while briefing said that the licensing of IT companies for installation and configuration of POS System would be completed by the end of August.
He further briefed that monitoring cells would be formed in each RTO headed by respective Chief Commissioner to supervise the POS integration for achieving desired results. Minister for Finance and Revenue directed to ensure effective tracking progress of installed POS machines and provide post deployment support to the retailers. He further directed to determine the total volume of sales by retailers to effectively tap the revenue generation through POS system after adjustment of input and output taxes. The finance minister directed to establish a cell at FBR HQ to fast track the progress on POS integration.
The meeting under the Chair of Minister for Finance & Revenue also discussed the strategy to increase the tax net possibilities.
FBR Team briefed that sizeable number of potential taxpayers have been identified after retrieving available data of their withholding taxes through third party sharing.
Chairman FBR briefed that efforts are being made to bring all the identified potential taxpayers into tax net. Minster for Finance and Revenue directed to remove all hurdles in bringing the identified potential taxpayers into tax net. He directed to further identify the potential taxpayers on the basis of third party data being received through credible sources.
The Minister stressed on the need to finalize the modalities of third party audit which would not only increase the tax net but would also generate much needed revenue. The meeting ended after it was decided to hold regular meetings to pursue the targets on fast track basis.
KARACHI: Metro Pakistan, a leading chain of stores, has integrated its sales with the Federal Board of Revenue (FBR) for real-time monitoring of transactions.
A statement said on Tuesday said that METRO Pakistan in collaboration with the FBR, has completed integration of all its Point of Sales (POS) with the latest Electronic Device System (EDS) introduced by the FBR.
The state-of-the-art system will allow the small retailers, medium retailers, and large tier-1 retailers to report and record their sales in real-time for taxation purposes and will ensure the sales tax paid by the customers at the POS counter and the GST at the cash counter will be deposited in the system.
The inauguration ceremony for the new system was held at METRO Store Islamabad with a live demonstration.
Dr. Waqar Masood Khan, the Special Assistant to Prime Minister on Revenue, was the Chief Guest, whereas Dr. Philipp Deichmann, Deputy Head of Mission, Embassy of Federal Republic of Germany in Pakistan, graced the occasion as the Guest of Honor, along with number of other of distinguished guests from the business community.
Speaking at the ceremony, Marek Minkiewicz, Managing Director METRO said: “METRO Pakistan is a prime example of foreign investment and fully respects the laws of the land, maintains its global high standards for social responsibility, and cooperates with the Government to the extent possible.
“METRO Pakistan supports and strengthens the documented economy and is an important exchequer collector.
“It is one of the largest tax collector in shape of Sales Tax and Income Tax in the Wholesale/Retail sector, from its Customers and Suppliers, and depositing the same in Government treasury. On average METRO Pakistan is collecting Rs.8.1billion per annum”.
Elaborating further, Asim Israr, Director Finance METRO added “After implementation of this integration at all tiers, there would be no hurdles left for the growth of wholesale and retail sector to flourish and also minimize any need for interaction between the taxpayer and tax-departments”.
He also thanked the FBR team lead by Director General Retail Sajidullah Siddique for their guidance, support and cooperation in successful implementation of the project.
Expressing his views at the occasion, the Chief Guest Dr. Waqar Masood Khan said: “I am extremely pleased that METRO and FBR have put in a lot of effort to implement current system and have worked for the betterment of the business and country.
I am hopeful that once all tiers will be covered by the government, the business community will enjoy a new viable, tax compliant integrated business model, something that will serve as a benchmark for our country in the future”.
Guest of Honour Dr. Philipp Deichmann, said: “I am impressed with the automation drive being introduced in tax system to facilitate the taxpayers and increase revenue. Pakistan’s economy is improving, however, the country need to focus on cohesive economic policies, improve tax regime to widen tax base and streamline lengthy litigation procedures to promote ease of doing business and attract more investment”.
The ceremony was followed by live demonstration session for the attendees, including METRO staff, Customers, Retailers, and businessmen present.
ISLAMABAD: Federal Board of Revenue (FBR) on Friday extended date for retailers to integrate their Point of Sale (POS) up to August 31, 2020.
The last date for integrating the POS for Tier-1 retailers was June 30, 2020.
The FBR said that only those retailers can integrate their POS by August 31 who submit their intention to RTOs/LTUs by August 20, 2020.
FBR sources said that the decision had been taken due to lockdown in the many parts of the country in order to prevent spread of coronavirus the business activities had become stand still.
They said that big outlets and shopping plazas are observing closure during the lockdown and many of those big retailers would not able to make compliance.
The deadline was expired on December 15, 2019 which was given by the FBR to tier-1 retailers to integrate their POSs with the FBR online system. However, the date was extended in order to give opportunity to big retailers to make compliance.
All tier-1 retailers are required to integrate all their POSs with FBR’s computerized system.
Tier-1 retailer is defined in section 2(43A) of the Sales Tax Act, 1990, to be a person who falls in any of the following categories:
(a) a retailer operating as a unit of a national or international chain of stores;
(b) a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks;
(c) a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rupees twelve hundred thousand;
(d) a wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers; and
(e) a retailer, whose shop measures one thousand square feet in area or more.
ISLAMABAD: Federal Board of Revenue (FBR) on Thursday extended the date for integration of Point of Sale (POS) by high volume retailers up to June 30, 2020.
The last date for integrating the POS for Tier-1 retailers was April 30, 2020.
The FBR said that only those retailers can integrate their POS by June 30 who submit their intention to RTOs/LTUs by June 20, 2020.
FBR sources said that the decision had been taken due to lockdown in the many parts of the country in order to prevent spread of coronavirus the business activities had become stand still.
They said that big outlets and shopping plazas are observing closure during the lockdown and many of those big retailers would not able to make compliance.
The deadline was expired on December 15, 2019 which was given by the FBR to tier-1 retailers to integrate their POSs with the FBR online system.
All tier-1 retailers are required to integrate all their POSs with FBR’s computerized system.
Tier-1 retailer is defined in section 2(43A) of the Sales Tax Act, 1990, to be a person who falls in any of the following categories:
(a) a retailer operating as a unit of a national or international chain of stores;
(b) a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks;
(c) a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rupees twelve hundred thousand;
(d) a wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers; and
(e) a retailer, whose shop measures one thousand square feet in area or more.
ISLAMABAD: Federal Board of Revenue (FBR) has allowed big retailers to integrate their point of sale (POS) with FBR’s online system by March 31, 2020 in order to avoid legal action.
The FBR on Monday extended the date of online integration of Tier-1 retailers.
The FBR said that it had condoned the time limit as provided in Sales Tax Rules, 2006 up to March 31, 2020, for online integration of tier-1 retailers’ POSs with board’s computerized system for real-time reporting of sales.
However, this permission is subject to condition that the teir-1 retailers should furnish in writing their willingness to integrated all their POSs in terms of the rules to respective Regional Tax Offices (RTOs)/Large Taxpayers Units (LTUs) by March 15, 2020.
Previously, the deadline was expired on December 15, 2019 which was given by the FBR to tier-1 retailers to integrate their POSs with the FBR online system.
All tier-1 retailers are required to integrate all their POSs with FBR’s computerized system.
Tier-1 retailer is defined in section 2(43A) of the Sales Tax Act, 1990, to be a person who falls in any of the following categories:
(a) a retailer operating as a unit of a national or international chain of stores;
(b) a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks;
(c) a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rupees twelve hundred thousand;
(d) a wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers”; and
(e) a retailer, whose shop measures one thousand square feet in area or more.
