FBR’s ‘overcontrol’ slows down T-1Rs integration with POS system

LAHORE: Overstretched control of the Federal Board of Revenue (FBR) has slowed down the integration of Tier-1 Retailers (T-1Rs) with Point of Sale (POS) system in the country, said sources from the local field formation.

Under the present arrangement, the Board issued show-cause notices to T-1Rs for payment of sales tax under the POS integration regime, a failure of which leads to conversion of the notices into orders of the Board to invoke penalties in absence of exclusion application.

In a recent case, said the sources, a leading bakery & confectionery brand has challenged a similar order in the Large Tax Office (LTO), pointing out that sales tax has already been paid which was not visible on the Pakistan Revenue Automated Limited (PRAL) system due to a technical glitch.

Accordingly, the said retailer has applied for a rollback of the order in order to reactivate its status on PRAL. However, since the Board has an exclusive control over each and every step, therefore, the retailer has to pass through a cumbersome process of writing to the Commissioner Inland Revenue, who would forward it to the Member Information Technology (IT) for issue direction to PRAL for a correction of its own error. In the meanwhile, the taxpayer would have to face the cost against the whole process.

It may be noted that Board has an overemphasized control over the POS system since day one. That is why, said the sources, the whole process is advancing snail-pace. So much so, the data collection by the Board for issuance of Sales Tax General Order (STGO) is also challenged excessively in the shape of exclusion applications which undermines credibility of the Board in the eyes of taxpayers. The Board collects data in the form of electricity bills, registration of retailers under section 181, excise department information and other sources.

The sources said many taxpayers like the present one has to run from pillar to post to reset their status due to centralized control of the Board. One reason of not extending the operation control to the field formations could be elimination of the element of corruption but it has added to the miseries of taxpayers.

The sources said the Board should empower the data base operator of PRAL at the level of field formation to make correction of technical glitches in the larger interest of taxpayers.

It may be noted that the POS integration drive has been facing hurdles since day one. Especially, the field formations had faced problem in their surveys when former Chairman Shabbar Zaidi had issued directions that there would be no interaction between tax collectors and taxpayers. Accordingly, the field formations had suspended their market surveys, which had hit the whole drive hard. It was followed by the outbreak of COVID-19 pandemic, which crippled the whole idea altogether.

It is for the third time that taxpayers are found stuck up due to overstretched control of the Board on the whole process.

Copyright Business Recorder, 2022