Registration as Tier-1 Retailers: Furniture industry seeks help of LCCI

LAHORE: The furniture industry has sought help of the Lahore Chamber of Commerce & Industry (LCCI) to get the issue of wrong treatment of furniture small shops as Tier-1 Retailers resolved.

During a meeting with the LCCI Vice President Haris Ateeq at LCCI, a delegation of furniture industry, led by the President of Pakistan Furniture Association Punjab Chapter Jafar Hussain said that furniture industry comprises workshops which employ artisans and annual labour except few entities which import and resell modular furniture to retailers on a large scale.

The delegation said the tax authorities and field officers are therefore issuing notices to Small Furniture shops/showrooms to register as Tier-1 Retailer which is unjust and not practicable for this industry.

LCCI Vice President Haris Ateeq urged the government to resolve the reservations of the furniture industry at the earliest as this sector is not only a major source of the income for the government but is also providing employment to a large number of people. He said that the Lahore Chamber of Commerce & Industry will take up this issue in the upcoming meeting of the Anomaly Committee for the Federal Budget 2022-23.

The delegation members said that furniture small retailers do not fall in definition of sub-section 43 A of section 2 of Sales Tax Act, 1990. They said that Furniture small retailers purchases furniture from unregistered manufacturers of cottage industry (5AB) so input invoices cannot be provided.

They said that those retailers who occupied even one sq feet less area than 2000 sq feet are exempted which constituted anomaly. Furniture does not fall in the category of Fast Moving Consumer Goods (FMCG).

They said that the furniture shops are meant for display of the bulky pieces of furniture and get order from the consumer rather than for retail sale. Furniture Shops/Show rooms require area more than 2000 Square feet hence an anomaly is there that the furniture shops/show rooms are considered retailers center are required to be registered as Tier-1 Retailer vide sales Tax Act, 1990 ibid and wrongly classifies as Tier-1 Retailer.

The delegation members said that the furniture shops/showrooms which are not part of national or international chain of stores nor or they located in air conditioned malls as such they should be excluded from the category of sub-section of 43-A of section 2 of Sales Tax Act, 1990.

They said that all small furniture shops/show rooms may be declared as cottage industry (5AB). They said that the condition of covered area should be removed and small furniture retailers should be brought in the category of fixed tax as proposed in the budget whereby fixed tax shall be charged.

Copyright Business Recorder, 2022