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ISLAMABAD: The Federal Board of Revenue (FBR) has issued a list of 1,136 big retailers (Tier-1), which are required to be integrated with the FBR’s Point of Sale (POS) system and would be denied 60 percent input tax credit in case of non-integration by October 10, 2021.

The FBR has issued sales tax general order (STGO) 3 of 2021, here on Tuesday.

The board has decided to raise sales tax demand against these big retailers (Tier-1), who are still not integrated with the FBR’s POS system by the deadline of October 10, 2021.

According to the FBR, in order to operationalise this important provision of law, a system-based approach has been adopted whereby all Tier-I retailers who are liable to integrate but have not yet integrated, with effect from July-2021 (sales tax returns filed in August 2021) are to be dealt with as per the procedure laid down in STGO No 1 of 2022 issued on 3rd August 2021.

The FBR said that vide the instant Sales Tax General Order, a list of 1,136 identified T-I retailers has been placed on the FBR’s web portal allowing them to integrate with FBR’s system by October 10, 2021 and the procedure of exclusion from this list of 1,136 identified T-1Rs shall apply as laid down in Para 2 of STGO 1 of 2022.

Big retailers must get integrated by 15th: FBR

Upon filing of sales tax return for the month of September 2021, all notified Tier-I retailers not having yet integrated, the input tax claim would be disallowed, without any further notice or proceedings, creating tax demand by the same amount, the FBR stated.

The list of non-integrated tier-1 retailers will be updated monthly on the FBR’s website and all those will be disallowed 60 percent input adjustment who will not integrate themselves with the POS software till 15th of every month.

The FBR has decided to update the list on 5th of every month and give them opportunity to apprise concerned Commissioner that they are not eligible to declare as Tier-1 retailers; otherwise, they will be disallowed 60 percent input adjustment in case of not integrating with the POS software.

If, however, a Tier-1 retailer feels that it is not Tier-1 retailer in terms of Section 2(43A) of Sales Tax Act 1990, it may get itself excluded from the list by applying to the Commissioner by August 10, 2021. A list of identified Tier-1 non-integrated retailers has been placed at the FBR’s web portal. If these identified Tier-1 retailers fail to integrate by September 15, 2021, they would be denied credit for input tax equal to 60 percent claimed in the sales tax return for the month of August 2021.

Copyright Business Recorder, 2021

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