Tier-1 retail outlets: IR commissioners told to implement POS invoicing system

Federal Board of Revenue (FBR) Chairman Shabbar Zaidi Wednesday issued directions to all chief commissioners of Inland Revenue for implementation of point of sale (POS) Invoicing System at all Tier-1 retail outlets. Tier-1 covers 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 center, excluding kiosks; a retailer whose cumulative electricity bill during the immediately preceding 12 consecutive months exceeds Rs 600,000; and a wholesaler-cum-retailer engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers and a retailer, whose shop measures 1,000 square feet in area or more.

According to the FBR's instructions to the field formations, the implementation of POS Linked Invoicing System at all Tier-1 Retail outlets is a very important administrative step for improving of taxation system in Pakistan.

Shabbar Zaidi said that it is desired that all field formations are to undertake proactive approach for the same. It is directed that in addition to relevant notices for implementation of the POS, dedicated teams be constituted and authorized by the convened Commissioners to contact each such retailer ensuring the entity's connectively with the system by December 25, 2019.

The FBR chairman said all large-scale retailers are suggested to integrate with the system. This will greatly assist such retailers as in such cases personal interaction with FBR will be minimized, he added.

Field formations may contact FBR Member IT for any IT related issues being faced in such issues, the FBR chairman added. The FBR has also condoned time limit up to December 15, 2019 for online integration of Tier-1 retailers' outlets with the Board's computerized system for real-time reporting of sales.

A tax expert said that all Tier-1 retailers as defined under section 2(43A) of the ST Act, 1990, read with section 3(9A), are required to integrate their point of sale (POS)/retail outlets with FBR's computerized system for real-time reporting of their sales with effect from December 1, 2019.

The FBR has directed all 'Tier-I' category of retailers to integrate their retail outlets with Board's computerized system for real-time reporting of their sales.

According to the FBR, commencing from December 2019, all Tier-I retailers shall integrate their retail outlets with Board's computerized system for real-time reporting of sales in the mode and manner as prescribed.

The supplies of finished fabric and locally manufactured finished articles of textile and textile made-ups and leather and artificial leather shall be entitled to the reduced rate subject to conditions.

The retail supplies of these items shall be subject to standard rate as prescribed if they are made from retail outlets which are not integrated in the manner prescribed by the FBR.

The integrated supplier who is found to have tampered with the system would no more be eligible for the reduced rate, if otherwise applicable, and his input tax shall also be reduced, the FBR added.

The FBR had introduced 'Electronic Invoice System' for restaurants, cafes, coffee shops, eateries, snack bars and hotels, and directed them to install Board's approved fiscal electronic device/software and register all their branches and each point of sale (POS) with the FBR's computerized system.

Under the amended sales tax rules 2006 last month, the FBR had also directed all 'Tier-I' category of retailers to integrate their retail outlets with Board's computerized system for real-time reporting of their sales.

Under the Electronic Invoice System, the registered person specified in rule 150ZA shall install such fiscal electronic device and software, as approved by the Board, available on its website with complete technical instructions for installation, configuration and integration.

The rule 150ZA is applicable on registered businesses being restaurants, cafes, coffee shops, eateries, snack bars and hotels having any of such business activities for the purpose of monitoring or tracking of taxable activities by electronic or other means.

The specified registered person shall register all his branches with the Board's computerized system, from which they make or intend to make supplies and shall also register each point of sale (POS) to activate the integration duly providing the information including POS registration number; name of business; branch name; branch address; POS identification number; and registration date.

The provisions of rules 150ZEB, 150ZEC and 150ZEG shall also apply to the sales made from each of the registered branches in respect of recording of sales; components and features of electronic fiscal device (EFD); functionalities of POS; transmission of sale invoice data to the Board; printing and contents of sale invoice including printing of QR code and FBR fiscal invoice number thereon; population of transmitted data in Annex-C of the return of relevant month; bearing of cost of equipment and integration thereof; display of FBR logo and the banner text; recording and transmission of online sales including those made through social media-sites; accreditation of POS system; and reporting of failure of registered person to transfer sale data by the customer.