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LAHOE: Both Tier-1 Retailers (T-1Rs) and tax inspectors of various field formations of Federal Board of Revenue (FBR) are busy in defeating the Point of Sale (POS) integration mechanism, introduced to broaden the tax net through documentation.

According to the modus operandi, the T-1Rs defeat the exercise by alleging that the field inspectors demand bribery to delay the process soon after they are served upon a notice to get integrated with the system. The sole objective of such an allegation is to delay their integration with the system.

Keeping in mind the tendency on the part of T-1Rs, the FBR has introduced the mechanism of exclusion certificate for the retailers in case they are of the view that they do fit in the criteria set for registration with the POS.

According to the mechanism, any retailer can apply for the exclusion certificate in case he does not qualify to the scheme. However, most of the traders prefer to complain against the field inspectors relating to corrupt practices instead of applying for the certificate.

Sources from the Regional Tax Office (RTO) said the phenomenon is being controlled by requiring the evidence of corrupt practices on the part of the field inspectors. According to the sources, inquiry is only initiated against the concerned tax inspectors in case tangible evidence is produced by the trader. They said this strategy has proved fruitful and the number of complaints has reduced drastically.

Furthermore, they said, traders are also advised to apply for the exclusion certificate in case he believes that he does not qualify to the registration criteria. He is further informed that the period utilized in deciding the application would be counted for imposing penalty in case he fails to prove his assertions.

According to well-placed sources, the number of exclusion certificates was much higher initially when Sales Tax General Orders (STGOs) were issued by the FBR on the basis of available data. At that time, they said, 80 percent of notices had been challenged due to the inaccuracy of data.

However, synchronization of the available data with latest field surveys has minimised this trend and number of applications for exclusion certificates has reduced to 10 percent today against the latest STGOs by the FBR. The total number of STGOs has reached 22.

Reliable sources from the RTO have further pointed out that most of the tax inspectors are not happy with load of work after the full-fledged implementation of the POS integration mechanism.

The exercise has become target-oriented therefore tax inspectors keep looking ways to get transferred to some other section to avoid the work load. Sources close the Commissioner RTO pointed out that number of applications keep piling up on daily basis, carrying recommendations from influential ones for a favourable consideration of the authority.

Copyright Business Recorder, 2022


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