Lahore

The Federal Board of Revenue has revamped the whole system of sales tax for retailers, abolishing the restriction of sales tax registration for those retailers, having Rs 5 million turnover.

There is no mandatory Sales Tax registration for retailers of having Rs 5 million, said member of Sales Tax Committee Kashif Anwar.

He said that Sales Tax Committee, one of the three committees constituted by the government to facilitate talks and resolve issues facing the business community, has dispelled the fears of retailers and business community which has the misperception that the imposition of 0.3% bank withholding tax would show their actual turnover which may exceed Rs 5 million and they would be forced to be registered for the sales tax regime.

According to the LCCI former vice president, under the SRO 608(I)/2014 dated July 2, 2014, the federal government had revamped the entire system of sales tax for retailers. Under the new regime, different categories have been introduced for the registration of retailers, which included a retailer operating as a unit of a national or international chain of stores; a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks; and a retailer whose cumulative electricity bill during the immediately preceding 12 consecutive months exceeds Rs. 600,000. Any retailer who does not fall in any of these categories would only pay sales tax on his electricity bill and would not be bound to register for the sales tax regime.

“For retailers, there is nothing to worry about on this count as the government has already introduced a new sales tax regime vide SRO 608/2014 which instead of applying the Rs 5 million turnover as yardstick for mandatory registration of sales tax, introduces different categories under which the sales tax regime is applicable,” said Kashif Anwar while responding to a question regarding apprehensions of the retailers and business community.

He said that the government is seriously thinking to withdraw the levy for filers on cash withdrawal while there is already no tax all banking transactions for them.

FPCCI president Mian Idrees said that govt is going to cancel all anti-traders acts at the end of the this month. He said that govt has understood that tax base cannot be enhanced without announcing business friendly policies. All acts regarding investigations and inquiries of trades which cause harassment among traders will be abolished. “Audit and raids are creating fear in businessmen and this system will be changed and positive things will be introduced.”

It is to be noted that through the Finance Act 2015, a new section 236P was introduced in the Income Tax Ordinance 2001. This section envisages 0.6% adjustable withholding tax on all banking instruments of more than Rs. 50,000/- per day issued by an account holder who has not filed income tax return for tax year 2014.

Business Community expressed its reservations on introduction of this adjustable Withholding tax on non-filers. On the directions of Finance Minister Ishaq Dar, negotiations were started with the business community.