E-compliance for real-time integration: Taxpayers including those in 14 business categories will have to pay heavy cost

ISLAMABAD: Taxpayers including those in 14 categories of business enterprises would have to pay heavy cost for electronic compliance for real time integration of their electronic invoicing system with the Federal Board of Revenue (FBR).

The specified enterprises included in the SRO 428(I)/2024 were required to be compulsory integration by July 1, 2024.

Astonishingly, one-time setup charges are Rs 1,500,000 for the commercial businesses. Out of this amount, software license fee cost is Rs 1,000,000 and testing/ implementation of payment gateway cost is Rs500,000. The annual support and maintenance charges included Rs 60 per invoice or Rs 3,500,000 per year (whichever is higher).

These service charges are quoted by the sole license-holder to one of the businesses required to be integrated under SRO 428(I)/2024.

Taxpayers face problems at e-Sahulat centres

Fourteen categories of business enterprises have been asked to mandatory integrate through POS systems. The enterprises to be included are relatively big or medium sized enterprises.

The Federal Board of Revenue (FBR) issued a new regulation (SRO 428(I)/2024) mandating online integration with their tax system. This means that the Point-of-Sale (POS) system of the declared businesses needs to be electronically linked to the FBR for real-time invoice transmission. Sole licence was granted to one company of Karachi.

Experts said that the said service provider is charging extraordinary fees in the name of setup charges/ annual support and maintenance charges. It is practically not possible for taxpayers to bear such heavy costs for electronic compliance. However, the FBR should bind its licensee to charge reasonably or bear the cost itself. Tax experts raised the question why taxpayers, who are already heavily burdened with taxes, will pay such an additional heavy cost?

Through SRO 428(I)/ 2024 March 22, 2024, a schedule has been inserted. It has replaced earlier two schedules. Following businesses would be required online integration of their businesses with the FBR:

1. Retailers including manufacturer cum-retailer, wholesaler-cum retailer, importer-cum-retailer or such other person who combines the activity of retail sale with another business activity.

2. Foreign exchange dealers/ Exchange Companies.

3. Private schools, colleges, universities, professional institutes/ vocational training centres where the fee per child is more than Rs 1,000 per month.

4. All medical service providers including dentists, physiotherapists, plastic surgeons, hair implant surgeons, and veterinary doctors where fee exceed Rs 500.

5. Private hospitals or medical care centres providing medical consultation, hospitalisation or other ancillary services.

6. Restaurants with air conditioning facilities

7. Hotels, motels, guest houses, marriage halls, Marquees, clubs including race clubs.

8. Health clubs, gyms, physical fitness centres, swimming pools and multipurpose clubs such as Lahore gymkhana, Islamabad club, Chenab Club, Karachi gymkhana, Royal Palm Lahore, Polo club etc. operated by any civilian/ non-civilian administration.

9. Inter-city travel by road with air conditioning facility.

10. Courier services and cargo services.

11. Beauty parlours, clinics and slimming clinics, massage centres, pedicure centres with air conditioning.

12. Pathological laboratories, medical diagnostic laboratories including X-Rays, CT Scan, M.R. Imaging etc.

13. Photographers, video-graphers and event managers where the fee charges are more than Rs 50,000 per event.

14. Chartered Accountant or a cost and management accountant.

It is worth mentioning that the FBR had approved the recommendations for grant of license to the qualified company, i.e., M/s Haball (Pvt) Ltd. as provided in the relevant Rule, license for the purpose of integration of electronic invoicing under Chapter XIV-BB of the Sales Tax Rules, 2006 as amended vide SRO 1788(1)/2023 and Chapter VIIA, Online Integration of Businesses, of the Income Tax Rules, 2002 as amended vide SRO428(1)/2024 was hereby granted to the said company, the FBR added.