The Federal Board of Revenue (FBR) is planning to charge fixed tax rates of Rs 5,000 and Rs 10,000 per quarter from two categories of small retailers based on city-wise category. Sources told Business Recorder that the small retailers may be divided into two categories on the basis of city-wise location. The first slab would be subjected to Rs 5,000 fixed tax per quarter (annual tax Rs 20,000) and the second slab would be charged fixed tax of Rs 10,000 per quarter (Rs 40,000 per annum).
Under the Finance Act 2019, a new condition (e) has been added to the existing definition of ''Tier-1 retailer'' under section 2(43 A) of the Sales Tax Act, 1990. Now, a retail shop having area more than 1,000 square feet shall also fall under tier-1 and shall be liable to discharge its liability under standard regime. Under Finance Act 2019, changes were made in regime of Tier-1 retailers: Sub-section (9A), relating to tier retailers, has been substituted, providing as under:
Option to pay 2% turnover tax has been withdrawn. Provisions relating to SRO 1125(I)/2011 have been omitted, thus subjecting textile and leather items to normal rate except for the integrated retail outlets for which the rate shall be 14% as per amendment in Eighth Schedule. A new proviso has been added wherein customers of Tier-1 retailers are entitled for pay-back up to 5% of sales tax involved in the sales tax invoice. This shall encourage the customers to demand sales tax invoice from registered retailers. However, these provisions shall be applicable when the Board so notifies.
Another new proviso aims at expanding the scope of real-time integration beyond textile and leather. These provisions shall become effective when the Board so notifies. After such notification, the input tax shall be reduced by 15% for retailers failing to integrate POSs in the prescribed manner, as provided in the newly inserted sub-section (6) in section 8B.
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