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ISLAMABAD: The Federal Board of Revenue (FBR) has the legal authority to seal the business premises of big retailers, who would fail to integrate their businesses with the Board's computerized system.

In this regard, the FBR has communicated to the field formations explanation of the enforcement measures introduced through the Finance Act 2020.

According to the FBR's instructions, the FBR has introduced the penalty for failing to integrate with FBR computerized system. The time period allowed to a registered person for integrating his business activities with FBR's computerized system, subsequent to imposition of penalty, has been reduced from six to two months. The law provided that both punitive actions of "embargo" and "sealing of premises" could be taken against a defaulting registered person who fails to integrate his business with the Board's computerized system. The word "embargo" has been omitted as a streamlining measure, FBR added.

Presently, all tier-1 retailers are required to integrate all their POSs with FBR's computerized system. 'Tier-1 retailer' is defined in section 2(43A) of the Sales Tax Act, 1990, to be a person who falls in any of the following categories: 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 centre, excluding kiosks; a retailer whose cumulative electricity bill during the immediately preceding 12 consecutive months exceeds Rupees twelve hundred thousand; 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 one thousand square feet in area or more.

To align the sales tax law with the provisions of the Income Tax Ordinance 2001, a provision parallel to Section 124A of the Income Tax Ordinance 2001 has been added by insertion of Section 11C through the Finance Act, 2020. The newly inserted section provides that where a question of law has been decided by Appellate Tribunal or High Court in favour of a particular registered person, and an appeal against the said order has been filed by the department, pending assessments of such taxpayer may also be finalized in accordance with the decided question of law till such time, such judgment is reversed or modified by subsequent higher court. And if such judgment is reversed or modified, all such earlier assessments shall be modified within one year of receipt of the court decision so as to conform to the pronouncement of the higher court, FBR added.

Copyright Business Recorder, 2020