Registration of tier-1 retailers under the Point of Sale (POS) Integration System of the Federal Board of Revenue (FBR) is not up to the mark due to the technical flaws, said sources.

It may be noted that the FBR has set March 16 as a deadline for retailers to show their willingness and March 31 for registration under the system. However, the number of retailers showing willingness or getting registered with the system is abysmally low.

Sources said one big reason behind a snail-pace growth in registration with the system is the holding of wrong surveys to assess the retailers falling under the category of Tier-1 retailers, which included (a) a retailer operating as a unit of a national or international chain of stores; (b) a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks; (c) a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rs 1,200,000; (d) 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"; (e) a retailer, whose shop measures one thousand square feet in area or more; and (f) any other person or class of persons as prescribed by the Board.

Sources said the survey of non-corporate zone of Regional Tax Office (RTO-II) reported total number of retailers of Tier-1 to 200 plus after conducting a survey on the basis of the criteria set by the Board. However, the actual number of retailers is not more than 60, as their turnover is much low in the zone despite possessing the area of 1000 square feet.

According to sources, the lists of retailers of Tier-1 should be revised before imposing fines on non-registration with the system. In case a Tier-1 retailer does not integrate his retail outlet in the manner as prescribed under sub-section (9A) of section 3, during a tax period or part thereof, the adjustable input tax for whole of that tax period shall be reduced by 15 percent. Also, a fine of Rs 500,000 or two hundred percent of the amount of tax involved, whichever is higher, would be imposed.

He shall, further be liable, upon conviction by a Special Judge, to simple imprisonment for a term which may extend to two years, or with additional fine which may extend to Rs 2 million, or with both. Any person who abets commissioning of such offence, shall be liable, upon conviction by a Special Judge, to simple imprisonment for a term which may extend to one year, or with additional fine which may extend to Rs 200,000 or with both.

Saher Aftab, focal person of non-corporate zone of RTO-II, when contacted said the field teams would inspect retailers after 31st of March to initiate legal course against the violators of law.

It may be noted that the FBR has already revised deadlines from 31st December 2019 to 31st January 2020 and now to 31st March 2020. Sources are of the view that another extension in the deadline could not be ruled out because of the negotiations of traders with the Board, discrepancies in surveys and over-occupancy of field staff with the burden of meeting revenue targets.