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The Federal Board of Revenue (FBR) has given of December 31, 2019 (Tuesday) deadline to big shopping malls and restaurants for installation of new software 'Point of Sale (POS)' to avoid sealing of their business premises and withdrawal of reduced rate of sales tax facility.

It is learnt that the FBR can disallow reduced rate of sales tax and input tax adjustment as well as seal business premises of such retail category under relevant tax laws.

Within the jurisdiction of federal capital, the FBR has dispatched tax notices to nearly 130 big retailers and restaurants with the said deadline to install POS. In case of non-compliance, legal consequences would be faced by the said retailers across the country.

One of such notices stated that in view of the amendments in Rule X1V-A of the Sales Tax Registration Rules, 2006 read with SRO 1203 (1)2019 dated 10-10-2019, the FBR has decided to replace RIMS software with Point of Sales and the information letter in this regard has already been issued to all retailers and restaurants for installation of POS immediately.

"In the light of above, since you have failed to install/integrate POS system, you are once again requested to install/integrate POS system immediately but not later than 2:00 pm as 31-12-2019," said the notification.

In case of failure, the proceedings under Section 40C of the Sales Tax Act 1990 may be initiated against the violator.

The relevant part of the section is reproduced as under which states that under Section 40C, the monitoring or tracking by electronic or other means (1) subject to such conditions and procedures, as it may being fit, imposed or specified, the Board may, by notification in the official gazette, specify any registered person or class of registered persons or any good or class of goods in respect of which monitoring or tracking of production, sales, clearance or stocks any other related activity may be implemented through electronic or other means as may be prescribed; (2) from such date as may be prescribed by the Board, no taxable goods shall be removed or sold by the manufacturer or any other person without affixing tax stamps, bound roll stickers, labels (barcodes), etc, in any such form, style and manner as may be prescribed by the Board in this behalf; (3) such tax stamps, banderols, etc, shall be acquired by the registered persons referred to in sub-section (2) from a licensee appointed by the Board for the purpose against price approved by the Board which shall include the cost of equipment installed by such licensee in the premises of registered persons.

Copyright Business Recorder, 2019