Tier-1 retailers given deadline for integration

Tier-1 retailers given deadline for integration

The Federal Board of Revenue (FBR) has issued a directive to Tier-1 retailers, urging them to integrate with the FBR’s Point of Sale (POS) System by the stipulated deadline to avoid the denial of input tax credit.

The directive is part of the FBR’s ongoing efforts to streamline tax processes and enhance transparency in the retail sector.

In Sales Tax General Order (STGO) No. 02, the FBR outlined the integration requirement for Tier-1 retailers, identifying a list of 977 retailers falling under this category. These retailers are mandated to integrate with the FBR’s POS System, and failure to do so by the specified deadline will result in the denial of input tax credit.

The FBR’s initiative aligns with its commitment to adopting a system-based approach, leveraging technology to ensure tax compliance and prevent tax evasion. The integration of Tier-1 retailers with the POS System is a crucial step toward achieving these objectives.

As per the statement issued by the FBR, the integration drive began with the implementation of Sales Tax General Order No.2 of 2022, effective from August 01, 2021. The FBR has placed a list of identified Tier-1 non-integrated retailers on its web portal.

The identified Tier-1 retailers have until September 15, 2021, to complete the integration process. Failure to meet this deadline will result in the denial of credit for input tax, specifically 60% claimed in the Sales Tax return for the month of August 2021.

Tier-1 retailers who believe they do not fall under this category, as defined in Section 2(43A) of the Sales Tax Act, 1990, have the option to apply for exclusion from the list. The application for exclusion must be submitted to the concerned Commissioner by September 10, 2021.

The FBR emphasizes the importance of timely integration, and to facilitate the process, the list of identified Tier-1 non-integrated retailers will be regularly updated. Those retailers remaining on the list will be considered non-integrated Tier-1 retailers, subject to the provisions of sub-section (9A) of Section 3 of the Sales Tax Act, 1990, which entails the disallowance of input tax to the extent of 60%.

The FBR’s directive underscores the significance of technology-driven solutions in tax administration, promoting a more efficient and accountable system. Retailers are encouraged to embrace the integration process to ensure compliance with tax regulations and contribute to a transparent and robust tax ecosystem.