Regional Tax Office (RTO)-II, Karachi has issued notices to 300 tier-I retailers for online integration with FBR system before the last date of ST returns filing for the month of December, 2019 to avoid blocking adjustment of input tax under sub-section (6) of section 8B of the Sales Tax Act 1990. According to official sources, the tax office has initially put 300 shopkeepers in tier-I retailers list, who are required to integrate their retail outlets with FBR's computerized system for real-time reporting of sales with effect from December 1, 2019 in the mode and manner prescribed in Chapter XIVAA of the Sales Tax Rules, 2006 under provision of the sub-section (9A) section 3 of the Act, read with clause (2) of Rule 150ZEA of the Sales Tax Rules, 2006 inserted vide SRO 1203(I)/2019 dated 10th October, 2019.

The RTO-II, Karachi has asked them to integrate their retail outlets with FBR's computerized system for real-time reporting of sales before the last date of ST returns filing for the month of December, 2019 to avoid blocking adjustment of input tax under sub-section (6) of section 8B of the Act.

They said that in case of non-integration with the FBR's computerized system for real-time reporting of sales, these tier-I retailers shall not be entitled to get adjustment of input tax under sub-section (6) of section 8B of the Act and adjustable input tax for whole of that tax period shall be reduced by 15%. In addition, they shall be liable for penalty as prescribed at serial No.(19) of section 33 of the Act along with default surcharge under section 34 of the Act.

Replying to a question, they said that if they were not enrolled under the Sales Tax Act, 1990, this was an opportunity for them to apply for registration and get their retail system integrated with FBR computerized system for real-time reporting of sales immediately and if they failed to comply, the tax office would compulsorily register them under section 14 of the Sales Tax Act, 1990 read with Rule 6 of the Sales Tax Rules, 2006 without any further notice.

To another question, they said that if these tier-I retailers did not comply the said requirement even after compulsorily registration then tax office may not only impose penalty under clause 7 of section 33(1) of the Sales Tax Act, 1990 but also arrest them and initiate prosecution under section 37A of the Sales Tax Act, 1990.