Federal Board of Revenue (FBR) is the premium revenue collection agency of Pakistan.
FBR requires only Tier-1 retailers to integrate their points of sale with its IT system. The Sales Tax Act 1990 (the Act) defines Tier-1 retailers.
Following businesses are Tier-1 retailers
Under the Act and FBR notifications, the following retail businesses are Tier-1 retailers.
- Official retail outlets of national and international brands. It also includes their chain of stores.
- Retail franchises and authorized retailers of national or international brands.
- A retailer who is selling in air-conditioned shopping malls, plaza or center. It does not include kiosks.
- Total electricity bill of retailers during the immediate last 12 months exceeds Rupees twelve hundred thousand (12 lac rupees).
- A business (by nature a wholesaler-cum-retailer) which imports bulk quantities of consumer goods, supplies these items on a wholesale basis to the retailers and it also sells to general end consumers as a retailer.
- A shop, store or any retailer accepts state bank approved online payments and digital transactions, debit and credit cards.
- A retailer that has paid advance withholding tax of rupees more than one hundred thousand (100,000/-) or five hundred thousand (500,000/-) under sections 236G and 236H of the Income Tax Ordinance, 2001 during the last 12 months.
Responsibilities of Tier-I retailers
Since integration of POS with FBR is a legal requirement. So, the Board is enforcing it actively. The retailers have certain responsibilities regarding the compliance with tax laws. I am mentioning these responsibilities in the coming lines.
- Retailers should ensure integrated POS on all the payment counters at each outlet.
- Their POS should function smoothly.
- They should report to the concerned Commissioner Inland Revenue within twenty-four hours of POS facing any issue like hackers’ attack, damage, disruption, any operational failure or tampering.
- The retail outlets must have credit and debit cards swipe facility.
- Retailers must ensure digital transfer of invoices if customers insist to pay via mobile wallets and bank transfers.
Conclusion
The purpose of POS integration is to end theft of sales tax and revenue. It is ensuring transparency in collection of sales tax. FBR is encouraging taxpayers and supporting taxpayers to integrate points of sale.
You can check out our another blog regarding the integration of point of sale.
