ISLAMABAD-Federal Board of Revenue (FBR) has asked all Tier-I retailers to integrate with Point of Sale (Linked Invoicing System) till the last date i.e. 31st August, 2020. The FBR directed this to 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. FBR has warned that the last date for such integration is 31st August, 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.
In last month, the FBR had extended the date for integration of point-of-sales (POS) system at retail outlets up to August 31 and asked retailers to avail reduced rate of 12 percent announced in the federal budget. The concept of POS integration was introduced in order to monitor sales of retailers and check sales tax evasion. The FBR has already warned to take harsh action against individuals who avoid linking their system with the FBR despite having the prescribed setup. Under the tax laws, if a retailer refuses to comply with the legal requirement, then such retailer would face a penalty of up to Rs500,000 or 200 percent of the tax amount involved, whichever is higher. Such retailer might also to be sentenced to imprisonment, which may be extended to two years.
The federal government in annual budget 2020-21 had set the target of connecting 15,000 retailers of tier-1 with the Point of Sale (POS) software in current fiscal year. Minister for Industries and Production Hammad Azhar had said the narrow tax base has been expanded by bringing retailers into the tax net. To achieve the target, the government had decreased sales tax rate from 14 percent to 12 percent for business registered with POS. According to the government, it would give relief to common man and to business also. The measure will help in documentation of economy. The FBR had envisaged a target of connecting 15,000 more retailers of tier-1 to the POS software in current fiscal year and ultimately the number would be expanded to 25,000 and then to other sectors. So far the FBR managed to bring a number of big retailers under this integration drive. However, many retailers falling under the definition are still reluctant to connect their outlets with the FBR.