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Tag: Tier-I

  • Adjustment restrictions hamper return filing by retailers

    Adjustment restrictions hamper return filing by retailers

    Retailers falling under Tier-1 have informed the Federal Board of Revenue (FBR) that they were unable to file monthly sales tax returns due to denial of adjustment by IRIS portal.

    A number of retailers jointly sent a letter to FBR chairman apprising about unfavorable behavior of IRIS Portal by denying adjustment against credit notes issued by Tier-1 retailers.

    READ MORE: FBR announces winners of third POS invoice draw

    The retailers drew attention of the FBR chairman towards Section 9 of the Sales Tax Act, 1990 read with Rule 20 of the Sales Tax Rules, 2006, tax invoice issued by a registered person can be amended/modified/cancelled through issuance of credit note as a result of cancellation of supply of return of goods or a change in the nature of supply or change in the value of the supply.

    They highlighted that sales made by Tier-1 retailers, as defined in clause 43A of Section 2 of the Sales Tax Act, 1990, to the end consumers are integrated with the FBR computerized system for real time reporting of sales in line with the Rules.

    READ MORE: FBR identifies 1,421 retailers for tax integration

    The FBR chairman has been informed that in case of sales return, credit note (sales return invoice) is issued by Tier-1 retailers in accordance with the relevant provisions of the Sales Tax Act, 1990. “IRIS portal of the FBR is also accepting this position and accepting credit notes issued by Tier-1 retailers, however, surprisingly, sales tax adjustment, relating to credit notes, which have been allowed in one month are being added back in sales tax liability of the next month in the IRIS based sales tax return.”

    The retailers said: “… this practice of the sales tax return portal is strictly against the law.”

    READ MORE: FBR makes rules for sealing retail outlets

    They said that if such illegal restrictions are imposed on Tier-1 retailers, who have invested huge amounts in hardware as well as software for integration of sales tax reporting with the FBR, how would it be possible for the FBR to attract other retailers to get themselves registered with the FBR. “Instead of appreciating the efforts of Tier-1 retailers, they are being denied their legal and legitimate right of sales tax adjustment on credit notes.”

    Due to serious flaw in the online sales tax return filing portal, a majority of Tier-1 retailers are still unable to file sales tax return for the month of January 2022 onward.

    The FBR chairman has been urged to direct concerned authorities to resolve the issue at the earliest to enable Tier-1 retailers to submit their sales tax return.

    READ MORE: POS invoice verification for prize scheme surges by 63%

  • FBR explains cash discount under sales tax laws

    FBR explains cash discount under sales tax laws

    ISLAMABAD: The Federal Board of Revenue (FBR) has explained cash discount related to invoices issued through Point of Sale (POS) by Tier-1 retailers.

    The FBR explained through an official note dated March 17, 2022 that cash discount has been allowed in the form of reduction of prices in seasonal sales / sales and the consideration in money is received after cash discount has been allowed.

    It is clarified that the value of supply for sales tax purpose is the actual value received in monetary terms excluding the amount of sales tax and not the gross value. “Hence, the sales tax will be calculated and charged on the actual or discounted price accordingly,” the FBR added.

    The FBR previously issued clarification in this regard through the official order dated October 13, 2021 on the standardized format of the sales tax invoice notified through SRO 1006(I)/2021 dated August 09, 2021.

    The revenue body said that representations from the taxpayers and bar councils were received seeking further clarification of the ‘trade discount’.

    It said that value of supply as per section 2 (46) of the Sales Tax Act, 1990 in respect of taxable supply means the consideration in money which the supplier receives from the recipient for that supply but excluding the amount of tax.

    In the previous explanation dated October 13, 2021, the FBR clarified that the discount if any to be given by a retailer has to be depicted on the invoice horizontally i.e. from left to right.

    READ MORE: Trade discount should be displayed on invoice: FBR

    “The captions such as total, sales tax, discount allowed appearing at the bottom of the invoice are standalone notations and do not necessarily add or subtract one another.”

  • FBR announces winners of third POS invoice draw

    FBR announces winners of third POS invoice draw

    ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday announced winners of third balloting of invoices issued through Point of Sale (POS) of retailers.

    According to the FBR, the bumper prize of Rs1,000,000 has been awarded to Nasreen Akhtar on the invoice issued by Save Mart.

    READ MORE: FBR announces prize winners in second POS invoice balloting

    The FBR announced winners of two second prizes of Rs500,000 each to Muhammad Sajid Aslam on the invoice issued by New Haji Super Store and Raheel Shahbaz on the invoice issued by Rahat Bakers.

    Similarly, the four winners of third prize amounting Rs250,000 each are Muhammad Shahid ur Rehman, Shahbaz Ahmad, Gul Niaz Bibi and Furqan.

    The FBR conduct computerized balloting of invoices issued by Tier-1 retailers on every 15th day of a month. This was third draw as it was started in January 15, 2022.

    The FBR encouraged people to actively participate in the balloting to win prizes after buying from POS integrated retailers.

    READ MORE: FBR announces winners of first POS prize draw

    The FBR previously issued a procedure for participating in the prize scheme.

    The revenue body said that the customers of the integrated tier-1 retailers, 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 the “tax asaan” application or by sending SMS to number 9966.

    READ MORE: Prize scheme on invoices issued by retailers

    The application shall notify the customer regarding the status of the invoice either as “verified” or “unverified”.

    In case of a 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 an unverified invoice, the customer shall report the same through the system. The Board shall conduct inquiry and take appropriate action under the relevant provisions of law.

    READ MORE: FBR launches prize scheme for POS customers

    The computerized draw for the prizes shall be held in the first week of every month 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 a scanned copy on the “tax assan” application. After successful biometric verification, winners shall be required to provide their IBAN through a “tax asaan” application.

    The total prize money and the denomination of the prizes shall be decided on month to month basis by the Board.

  • FBR identifies 1,421 retailers for tax integration

    FBR identifies 1,421 retailers for tax integration

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday issued a list of 1,421 retailers for mandatory integration with online tax system.

    The FBR directed the retailers to integrate with the online tax system by March 10, 2022 in order to avoid harsh action.

    The revenue board issued Sales Tax General Order No. 10 of 2022 asking Tier-1 retailers for integration with FBR’s Point of Sale (POS) system.

    READ MORE: FBR issues list of 1,358 retailers for mandatory POS

    The FBR said that the Finance Act, 2019 added sub-section 6 to section 8B of the Sales Tax Act, 1990 whereby a Tier-1 retailer, who did not integrate its retail outlet in the manner prescribed under sub-section 9A of Section 3 of the Sales Tax Act, 1990 during a tax period, its adjustable tax for that period would be reduced by 15 per cent. The figure of 15 per cent has been raised to 60 per cent through Finance Act, 2021.

    The FBR further said that in order to operationalize the important provision of law, a system-based approach has been adopted whereby all Tier-1 retailers, who are liable to integrate but have not yet integrated, with effect from July 2021 (sales tax return filed in August 2021) are to be dealt with as per the procedure laid down in STGO No. 1 of 2022 issued on August 3, 2021.

    READ MORE: Prize scheme on invoices issued by retailers

    As per latest the STGO No. 10 of 2022, a list of 1,421 identified Tier-1 retailers has been issued allowing them to integrate with FBR’s system by March 10, 2022 and the procedure of exclusion from the list of 1,421 identified retailers shall apply as laid down in Para 2 of STGO 1 of 2022 dated August 03, 2021.

    The FBR said upon filing of sales tax return for the month of February 2022 for all notified Tier-1 retailers having yet integrated, their input tax claim would be disallowed as above, without any further notice or proceedings, creating tax demand by the same amount.

    READ MORE: FBR decides penal action against defaulting retailers

  • Tax offices fail to meet target of integrating retailers

    Tax offices fail to meet target of integrating retailers

    ISLAMABAD: The Federal Board of Revenue (FBR) has expressed annoyance over the lack of interest shown by field offices in integrating Point of Sale (POS) of Tier-1 retailers with the online tax system.

    According to an official document related to Tier-1 Retailers POS Integration – Third Quarter Targets (January 2022), the analyses revealed except for Large Taxpayers Office (LTO) Karachi and Regional Tax Office Bhawalpur, “none of the formations have achieved their assigned targets.”

    READ MORE: FBR issues list of 1,358 retailers for mandatory POS

    “This is an alarming situation which reflects negatively on the commitment on you formations,” the FBR informed the tax offices.

    The FBR directed Chief Commissioners Inland Revenue of tax offices to personally look into the state of affairs and ensure a healthy figure of Tier-1 Retailers POS Integration against the assigned monthly targets.

    READ MORE: Prize scheme on invoices issued by retailers

    The Member Inland Revenue – Operations has shown displeasure over the slow pace of integration of Tier-1 retailers, notified through Sales Tax General Orders (STGOs). “… These monthly targets are based on STGO and poor percentage of integration in January 2022 indicates lack of commitment of field formations both in integrating the Tier-1 retailers cleansing of STGOs list of taxpayers,” the official document added.

    READ MORE: FBR decides penal action against defaulting retailers

    According to the details, the tax offices were required to integrate 2828 Tier-1 retailers but those offices were able to integrate only 407 retailers during the month of January 2022.

    READ MORE: Imprisonment for retailers on tax integration failure

  • FBR issues list of 1,358 retailers for mandatory POS

    FBR issues list of 1,358 retailers for mandatory POS

    ISLAMABAD: The Federal Board of Revenue (FBR) has notified a list of 1,358 retailers for mandatory installation of Point of Sale (POS) and integrate the same with the tax system.

    The FBR on Friday issued the list of 1,358 retailers by notifying Sales Tax General Order (STGO) No. 9 of 2022 dated February 04, 2022.

    The FBR said that the Finance Act, 2019 added sub-section (6) to section 8B of the Sales Tax Act, 1990 whereby a Tier-1 Retailer who did not integrate its retail outlet in the manner prescribed under sub-section (9A) of section 3 of the Sales Tax Act, 1990 during a tax period, its adjustable tax for that period would be reduced by 15 per cent. The figure of 15 per cent has been raised to 60 per cent vide Finance Act, 2021.

    READ MORE: Prize scheme on invoices issued by retailers

    The FBR added that in order to operationalize this important provision of law, a system-based approach has been adopted whereby all Tier-1 retailers who are liable to integrate but have not yet integrated, with effect from July-2021 (Sales Tax Returns filed in August 2021) are to be dealt with as per the procedure laid down in STGO No. 1 of 2022 issued on August 03, 2021.

    READ MORE: FBR decides penal action against defaulting retailers

    Through the instant STGO No. 9, a list of 1,358 identified tier-1 retailers has been placed on FBR’s web portal at www.fbr.gov.pk allowing them to integrate with FBR’s system by February 10, 2022, and the procedure of exclusion from this list of 1,358 identified retailers shall apply as laid down in Para 2 of STGO 1 of 2021 dated 03.8.2021.

    “Upon the filing of Sales Tax Return for the month of January 2022 for all hereby notified retailers not having yet integrated, their input tax claim would be disallowed as above, without any further notice or proceedings, creating tax demand by the same amount,” the FBR said.

    READ MORE: Imprisonment for retailers on tax integration failure

  • Debt, credit card machines must for POS retailers: FBR

    Debt, credit card machines must for POS retailers: FBR

    ISLAMABAD: The Federal Board of Revenue (FBR) on Wednesday said retailers, who integrated Point of Sale (POS), must have facility of debt and credit card machines to facilitate their customers in making payments.

    The FBR issued Circular No. 05 of 2022 regarding implementation of Rule 150ZEB(II) of the Sales Tax Rules, 2006.

    READ MORE: Who are Tier-1 retailers under Sales Tax Act?

    The revenue body said that all Tier-1 retailers are expected to maintain the highest standards of documentation, reporting and transparency.

    In their endeavors to achieve such high standards, they are integrated with FBR’s IT system for real-time reporting of their economic transactions.

    READ MORE: FBR issues list of 608 Tier-1 non-compliant retailers

    It has transpired that many integrated Tier-1 retailers are indulged in making cash transactions, which is not only against the overall scheme of things, but also the intended objectives.

    In this connection, it is pertinent to note that Rule 150ZEB(II) of the Sales Tax Rules, 2006, mandates that each Tier-1 Retailer “must have the facility of debit and credit card machines installed at each notified outlet and the sales through debit or credit cards shall not be ordinarily refused.”

    READ MORE: Tier-1 retailers given deadline for integration

    “Accordingly, all integratable Tier-1 Retailers are liable to have debt/credit card machine installed at their outlets and IRS field formations to ensure implementation the rules in this respect,” the FBR added.

  • FBR identifies 1,284 retailers for POS integration

    FBR identifies 1,284 retailers for POS integration

    ISLAMABAD: The Federal Board of Revenue (FBR) has identified 1,284 retailers for force them to integrate Point of Sale (POS) with the tax system.

    (more…)
  • FBR decides penal action against defaulting retailers

    FBR decides penal action against defaulting retailers

    ISLAMABAD: Federal Board of Revenue (FBR) has decided to take all penal action and launch prosecution against defaulting Tier-1 retailers.

    In this regard an important meeting was held recently in the FBR headquarter. The meeting was headed by Member Federal Board of Revenue (IR-Operations), Qaiser Iqbal meeting with the top leadership of FBR Field Formations through video link facility.

    READ MORE: FBR redefines Tier-1 retailers for integration

    He reaffirmed his commitment to continue with integration of eligible Tier-1 retailers with full force and vigor.

    He conveyed the unflinching resolve of Adviser to the Prime Minister on Finance and Revenue, Shaukat Tarin with the directions that the largest 500 retailers be fully integrated in the first phase, followed by next 500 and so on.

    The prize Scheme launched by FBR on both Print and Electronic Media was also discussed in details.

    READ MORE: FBR announces first POS prize scheme draw on Jan 15

    He directed the Field Formations to ensure its proper promotion and ensure that the Tier-1 retailers update all their branches on Goolge to facilitate their customers.

    Qaiser Iqbal also stressed upon effective enforcement measures for ensuring true and accurate reporting of sales by Tier-1 integrated retailers.

    READ MORE: Who are Tier-1 retailers under Sales Tax Act? PkRevenue.com

    He emphasized upon adopting all penal and prosecution measures against defaulting Tier-1 retailers on account of non-integration and those involved in tax fraud of any shade or grade.

    He also hoped that Team Inland Revenue would spare no effort nor energy to make this innovative campaign on POS a true success story which promises a significant increase in tax revenue.

  • FBR announces first POS prize scheme draw on Jan 15

    FBR announces first POS prize scheme draw on Jan 15

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday announced that the first balloting for prize money on invoices issued by retailers of Point of Sale (POS) will be held on January 15, 2022.

    The FBR said that thousands of prizes worth a hundred thousand rupees will be distributed every month to the winners after computerized balloting.

    Those buying from POS integrated retailers in the month of December 2021 will be included in the balloting, the FBR said.

    READ MORE: FBR redefines Tier-1 retailers for integration

    The revenue body encouraged people to actively participate in the balloting to win prizes after buying from POS integrated retailers.

    FBR is launching a media campaign for the awareness of people w.e.f. December 11, 2021.

    The FBR previously issued a procedure for participating in the prize scheme.

    The revenue body said that the customers of the integrated tier-1 retailers, 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.

    READ MORE: Who are Tier-1 retailers under Sales Tax Act? PkRevenue.com

    The customers shall verify the electronically generated invoice of integrated retailers either through the “tax asaan” application or by sending SMS to number 9966.

    The application shall notify the customer regarding the status of the invoice either as “verified” or “unverified”.

    In case of a 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 an unverified invoice, the customer shall report the same through the system. The Board shall conduct inquiry 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 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 a scanned copy on the “tax assan” application. After successful biometric verification, winners shall be required to provide their IBAN through a “tax asaan” application.

    The total prize money and the denomination of the prizes shall be decided on month to month basis by the Board.

    READ MORE: FBR launches prize scheme for POS customers