FBR allows field formations to seal Tier-1 retailers’ outlets

LAHORE: The Federal Board of Revenue (FBR) has allowed its field formations to seal Tier-1 retailers’ outlets by amending provisions relating to penalties of Sales Tax Act, 1990, said sources.

They said changes have been incorporated to section 25 and section 33 of the Sales Tax Act, authorizing the field formations to seal the Tier-1 outlets found involved in issuing three receipts in a day or five in a week without a quick response (QR) code. Furthermore, the field formations have also been authorized to seal outlets failing to get integrated despite falling in the requisite category, the sources added.

According to the sources, the filed formations were in the process of data analysis regarding Tier-1 retailers to implement the amended law ahead. “We have started working on the data and have found a large number of retail outlets not issuing QR code-laden receipts to their customers,” said another source requesting anonymity.

Meanwhile, Chief Commissioner Regional Tax Office (RTO) Lahore Nasir Iqbal told this scribe that penalties worth Rs3.7 billion have been imposed against 1700 retailers since September 2021, out of which Rs43 million have been recovered till date.

He said the Board had separated some 2600 cases as Tier-I retailers back in June 2021, out of which some 900 were dropped from the list on account of wrong assessment. According to him, some 319 retailers approached the RTO after issuance of notices and got integrated with the system as Tier-1 retailers.

The Chief Commissioner said the Board had also approved some 13 cases to proceed against under section 40-B and deputed monitoring teams on the outlets in various localities of Lahore Division.

He said the RTO has made recoveries from retailers ranging between Rs2 million to Rs10 million out of penalties imposed so far. He pointed out that a strong awareness campaign coupled with penalties has led to substantial increase in number of Tier-1 retailers integrated with the Point of Sales (POS) system. He said the Board has also created two help lines for general consumers interested to launch complaints for non-issuance of proper invoice against their purchase.

According to him, the Board has also approved setting up of rapid response teams to respond to all such complaints.

At present, he added, a real time test of this complaint registration system was underway. Soon a team from the RTO would visit Lahore Chamber of Commerce & Industry (LCCI) to give briefing on the system to Tier-1 retailers, followed by its implementation on ground.

When asked about the revenue generation made by the Board out of POS integration system so far, Nasir said the objective of the whole exercise is to plug the loopholes in collection of sales tax from Tier-1 retailers and the past performance of the Board suggests phenomenal success on this front.

According to him, POS is a special regime designed carefully to collect General Sales Tax on behalf of the government.

Copyright Business Recorder, 2022