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  • FBR constitutes committees for integration of Tier-I retailers

    FBR constitutes committees for integration of Tier-I retailers

    ISLAMABAD: Federal Board of Revenue (FBR) has constituted central committee and regional committees to oversee the integration of Tier-I retailers with the FBR system.

    The FBR said that in pursuance of the Memorandum of Understanding (MOU) signed between the FBR and the Chainstore Association of Pakistan (CAP) on October 28, 2020, a central committee and regional committees have been constituted to oversee the process of integration of Tier-I Retailers.

    The central committee would look into issues related to input tax issues, HS Code issues, customer incentivization, software problems etc.

    Similarly, the Regional Committees would be responsible for identification Tier-I and Tier-II retailers in their respective areas and to liaise with the chief commissioners concerned besides resolving sectoral as well as individual issues of retailers.

    Following Central and Regional Committees have been constituted comprising of FBR and CAP’s representatives:

    Central Committee:

    FBR Representatives:

    i. Director General Retail

    ii. Chief (IR- Analysis)

    iii. Second Secretary Retail

    CAP’s Representatives:

    i. Tariq Mehboob

    ii. Irfan Iqbal Sheikh

    iii. Asfandyar Farrukh

    iv. Mardan Ali Zaidi

    v. Mohammad Shamsuddin

    vi. Mustafa Bashir

    vii. Raheel Meghani

    viii. Sheikh Owais Mehmood

    ix. Addel Rauf

    x. Tanveer Niaz

    xi. Ch. Asim Ghous

    xii. Mohammad Imran Saleemi

    Karachi Region Committee

    FBR Representatives:

    i. Chief Commissioner Inland Revenue, MTO Karachi

    ii. Focal Person, POS integration, MTO Karachi.

    CAP’s Representatives:

    i. Asfandyar Farrukh

    ii. Junaid Dandia

    iii. Salman Saeed

    iv. Raheel Meghani

    v. Mustufa Bashir

    vi. Rafiq Chamdia

    Lahore Region Committee

    FBR Representatives:

    i. Chief Commissioner Inland Revenue RTO, Lahore

    ii. Focal Person, POS integration, RTO Lahore

    CAP’s Representatives:

    i. Tariq Mehmood

    ii. Wasif Butt

    iii. Mohammad Imran Saleemi

    iv. Mardan Ali Zaidi

    v. Asim Javed

    vi. Omar Saeed

    Islamabad Region Committee

    FBR Representatives:

    i. Chief Commissioner Inland Revenue RTO, Islamabad

    ii. Focal Person, POS integration, RTO Islamabad

    CAP’s Representatives:

    i. Shaikh Owais Mehmood

    ii. Asim A Majeed

    iii. Ahszan Zafar Bakhtawari

    iv. Shamsuddin Sultan Ali

    v. Addel Rauf

    vi. Ch. Tahir

  • Retail price defined under Sales Tax Act

    Retail price defined under Sales Tax Act

    Sales Tax Act, 1990 has defined ‘retail price’ as a price fixed for sales of goods to the end consumers.

    The Sales Tax Act, 1990 [updated up to June 30, 2020 issued by the Federal Board of Revenue (FBR)] defines the ‘retail price’ with reference to the Third Schedule of the Act, as the price fixed by the manufacturer or importer, in case of imported goods, inclusive of all duties, charges and taxes (other than sales tax) at which any particular brand or variety of any article should be sold to the general body of consumers or, if more than one such price is so fixed for the same brand or variety, the highest of such price:

    Provided that the FBR may through a general order specify zones or areas for the purpose of determination of highest retail price for any brand or variety of goods.

    The Act also defines the work retailer as a person supplying goods to general public for the purpose of consumption:

    Provided that any person, who combines the business of import and retail or manufacture or production with retail, shall notify and advertise wholesale prices and retail prices separately, and declare the address of retail outlets.

  • Retailers share CNICs of consumers with FBR

    Retailers share CNICs of consumers with FBR

    ISLAMABAD: Retailers registered with Federal Board of Revenue (FBR) have started obtaining detail of Computerized National Identity Card (CNIC) of consumers, who buy goods above Rs100,000, tax officials said.

    The sources on Tuesday said that retailers having sales tax registration number (STRN) were providing details of ordinary consumers on sale of goods above Rs100,000 through their monthly sales tax return.

    The threshold amount was increased from Rs50,000 to Rs100,000 through Finance Act, 2020.

    The sources said that through Finance Act, 2019 an important amendment was inserted to Sales Tax Act, 1990 under which it was made mandatory for registered retailers to collect information of ordinance consumers.

    The FBR explains ordinary consumer as a person who is buying the goods for his own consumption and not for the purpose of re-sale or processing.

    The retailers are required to collection information of retailers including name, address and CNIC etc.

    This condition of CNIC or NTN was to apply from August 01, 2019. However, business community had demanded to extend the application of the condition of NTN besides it was also demanded to increase the threshold for requirement of CNIC.

    The FBR explained the implementation of the CNIC through Circular No. 01 of 2019 dated July 26, 2019 that Section 23 of the Sales Tax Act, 1990, relating to issuance of invoices and particulars to be specified therein, has been amended to provide that in case of supplies to un-registered persons, their NIC or NTN number shall be specified in invoice.

    The caveats, provided therein, are as under: NIC or NTN shall not be required in case of supplies made by a retailer where the transaction value inclusive of sales tax amount does not exceed rupees fifty thousand and the sale is being made to an ordinary consumer buying goods for his own consumption and not for the purpose of resale or processing;

    If it is subsequently proved that NIC provided by the purchaser was not correct, liability of tax or penalty shall not arise against the seller, in case of sale made in good faith.

    The FBR through Sales Tax Circular No. 02 of 2019 issued clarification in this regard stating that it had been observed in many cases, suppliers of goods and services are charging sales tax on invoices/receipts without identifying their sales tax registration number (STRN) on the invoice/receipts issued to the customers. At times, National Tax Number (NTN) is indicated on invoices, to exhibit that the suppliers is registered.

    Customers are suggested to ask for invoices/receipts having sales tax number on the invoice/receipts on purchase of goods and services. Sales tax can only be recovered from the customer if the supplier is registered for sales tax purpose, and reflects the STRN on the invoice/receipt issued to the customer.

    “In other cases, the supplier is not entitled to recover sales tax from the customers. Customers should beware of the same.”

    Explaining the purpose of the clarification, the FBR said that may suppliers were charging sales tax from customers without getting them registered under the sales tax regime.

    This practice is against the law and is liable to penal action. This practice leads to increase in prices and undue enrichment of sellers without any deposit of tax with the government. Customers are suggested to seek invoice/receipts from suppliers with STRN on the invoices/receipts issued, if sales tax is charged on their purchases.

    The FBR further clarified that buyer is not required to provide his NIC in case of purchases from a person not registered for sales tax.

  • FBR decides action against retailers for avoiding mandatory integration

    FBR decides action against retailers for avoiding mandatory integration

    ISLAMABAD: Federal Board of Revenue (FBR) has decided to take action against retailers having huge turnovers for not complying with mandatory integration with the online system of the tax authority.

    In this regard the FBR on Tuesday directed the retailers, who are required to integrate their sales and purchases under Sales Tax Act, 1990, to link their invoicing system by August 31, 2020.

    The FBR has explained that all retailers who have the network of chain stores throughout Pakistan, located in air-conditioned big shopping malls or plazas and their cumulative electricity bill during the immediately preceding twelve consecutive months exceeds twelve hundred thousand rupees and they are engaged in bulk import and supply of consumer good on wholesale basis to the retailers as well as on retail basis in to the consumer and their shop’s size measures one thousand square feet in area or more must integrate their retail outlets with the FBR’s computerized system for real time reporting of sales.

    FBR has warned that the last date for such integration is August 31, 2020 and afterwards those who failed to integrate would be imposed a penalty up to rupees one million and if the offence continued, the business premises of such retailer shall be sealed.

  • Big retail units to be sealed till integration with FBR

    Big retail units to be sealed till integration with FBR

    ISLAMABAD: Big retail units shall be sealed till their integration with the online system of the Federal Board of Revenue (FBR) for sharing sales and purchases.

    Sources in the Federal Board of Revenue (FBR) said that the big retail units are required to integrate their outlets with the FBR under Sales Tax Act, 1990.

    However, those retailers who failed to integrate their outlets with the FBR would face punitive action as defined in the statute.

    The sources said that through Finance Act, 2020 amendment has been made related to penalty for non-compliance for linkage of sales and purchase data with the FBR.

    According to amendment made to Sales Tax Act, 1990, any person, who is required to integrate his business for monitoring, tracking, reporting or recording of sales, production and similar business transactions with the board or its computerized system, fails to get himself registered under the Act, and if registered, fails to integrate in the manner as required under law.

    “Such person shall be liable to pay a penalty up to one million rupees, and if continues to commit the same offence after a period of two months after imposition of penalty as aforesaid, his business premises shall be sealed till such time he integrates his business in the manner as stipulated under sub-section (9A) of Section 3 or Section 40C, as the case may be.”

    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.

    The FBR 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 previously 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.

    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.

  • FBR extends date for integration of Tier-1 retailers

    FBR extends date for integration of Tier-1 retailers

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday extended the date for integration of Point of Sale (POS) by high volume retailers up to April 30, 2020.

    The last date for integrating the POS for Tier-1 retailers was March 31, 2020.

    The FBR said that only those retailers can integrate their POS by April 30 who submit their intention to RTOs/LTUs by April 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.

    Previously, the FBR on March 09, 2020 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.

    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

  • FBR may extend date for Tier-1 retailers POS integration

    FBR may extend date for Tier-1 retailers POS integration

    ISLAMABAD: Federal Board of Revenue (FBR) is likely to extend the last date for big retailers to integrate their point of sales (POSs) with the online system of the tax system owing to ongoing lockdown to prevent spread of coronavirus, sources said on Wednesday.

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  • FBR links 5,783 POS of retailers with online system

    FBR links 5,783 POS of retailers with online system

    ISLAMABAD: Federal Board of Revenue (FBR) has integrated 5,783 Point of Sales (POS) of 286 retailers so far with the hectic efforts of field formation, FBR spokesman said on Thursday.

    The spokesman said that the system had been made fully functional. The entries made through POS have been directly received by the FBR through online system.

    In order to create linkage with the FBR online system, retailers are required to download a software which is available on the FBR’s official website.

    Once the software is downloaded and activated the transactions made by a retailer appeared on FBR system and stored in its database, the spokesman added.

    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.

    POS integration is mandatory for all tier-1 retailers irrespective of the items they are dealing in.

    All tier-1 retailers whether dealing in textile and leather items or any other item are required by law to integrate their POSs with FBR’s system.

    The rate of sales tax for items sold by integrated retailers shall be the same as for all other suppliers as provided under the Sales Tax Act, 1990.

    Only exception is for locally manufactured textile and leather items, which if sold by integrated retailers are subject to concessionary rate of 14 percent, and if sold by any other supplier are subject to 17 percent standard sales tax.

  • Sale integration mandatory for retailer consuming electricity above Rs1.2 million

    Sale integration mandatory for retailer consuming electricity above Rs1.2 million

    KARACHI: A retailer, who is consuming electricity above Rs1.2 million in a year, the online integration through point of sale has been made mandatory.

    Definition of the term Tier I retailer has been elaborated to include a retailer falling in any one or more of the categories contained in said definition.

    A retailer whose cumulative electricity bill for last 12 consecutive months exceeded Rs 600,000 was included in definition of Tier I retailer.

    The said limit of Rs 600,000 has been enhanced to Rs 1,200,000 through Tax Laws (Second Amendment) Ordinance, 2019.

    Further, Federal Board of Revenue (FBR) has been empowered to prescribe any person or class of persons to be considered a Tier-I Retailer.

    The amended definition of Tier-I Retailer is as under:

    “Tier-1 retailer” means a retailer falling in any one or more of the following categories, namely:–

    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 center, 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;

    e) a retailer, whose shop measures one thousand square feet in area or more; and

    f) any other person or class of persons as prescribed by the Board.

  • FBR constitutes market committees at 17 RTOs

    FBR constitutes market committees at 17 RTOs

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday constituted market committees within the jurisdiction of 17 Regional Tax Offices (RTOs) to resolve the issues of small traders and retailers.

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