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ISLAMABAD: The Federal Board of Revenue (FBR) has issued a list of 608 big retailers (Tier-1), which are required to be integrated with the FBR's Point Of Sale (POS) system and would be denied 60 percent input tax credit in case of non-integration.

The FBR has issued Sales Tax General Order (STGO) 4 of 2021, Saturday.

The board has decided to raise sales tax demand against these big retailers (Tier-1), who are still not integrated with the FBR's POS system by the deadline of October 10, 2021.

According to the Finance Act 2019, a Tier-1 retailer, who did not integrate its retail outlet in the manner prescribed under the Sales Tax Act, 1990, during a tax period, its adjustable tax for that period would be reduced by 15 percent.

The figure of 15 percent has been raised to 60 percent vide Finance Act, 2021. In order to operationalise 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 3rd August 2021.

Integration with POS system: Notices issued to 200 Tier-1 retailers

The FBR said that vide the instant STGO, a list of 608 identified Tier-1 retailers has been placed on the FBR's web portal, allowing them to integrate with the FBR's system by November 10, 2021 and the procedure of exclusion from this list of 608 identified Tier-1 shall apply as laid down in para 2 of STGO 1 of 2022.

Upon filing of sales tax return for the month of October 2021, all notified Tier-I retailers not having yet integrated, the input tax claim, would be disallowed, without any further notice or proceedings, creating tax demand by the same amount, the FBR stated.

The FBR has decided to update the list on 5th of every month and give them an opportunity to apprise concerned Commissioner that they are not eligible to declare as Tier-1 retailers; otherwise, they will be disallowed 60 percent input adjustment in case of not integrating with the POS software.

Copyright Business Recorder, 2021

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