ISLAMABAD: The Federal Board of Revenue (FBR) is required to check the authenticity of the point of sale (PoS) software provided by the authorised vendors to the Tier-I retailers integrated with the FBR.
Sources told Business Recorder here on Thursday that the 46 third-party vendors were permitted to install the POS system at the retail outlets.
However, the FBR needs to verify the functioning and authenticity of the POS system installed at the retail outlets.
In the past, the FBR had issued list of vendors, who have provided point of sale (POS) software to those retailers, who have integrated their POS software with the FBR.
The FBR’s list of POS software vendors revealed names and contacts of 46 vendors operating in Karachi, Lahore, Rawalpindi, and Islamabad.
According to sources, there are apprehensions of the connivance between the vendor and retailer to conceal sales at the retail outlets in the absence of a foolproof mechanism to check the authenticity of the installed software.
If a vendor installs software which can show less sales or half sales tax or conceal total sales, whether the FBR has verified such installed software with the help of the Pakistan Revenue Automation Limited (PRAL) or any other department. If there is any connivance between the vendor and retailer, what system is in place to check the functioning of the installed software, experts added.
The FBR would deny 60 percent input tax credit in case of non-integration. 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.
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 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.
A list of identified Tier-1 non-integrated retailers has been placed at the FBR’s web portal.
Copyright Business Recorder, 2021