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Karachi: Federal Board of Revenue (FBR) warns retailers of large entities for not providing an online access to sales and purchases.
In this regard, the FBR issued Sales Tax General Tax Order (SGTO) No.07,20223 regarding integration of retails outlets using Point Of Sales (POS) system with the FBR.
Accroding to FBR, the Finance Act, 2019 added sub section (6) to section 88 of the Sales Tax Act, 1990 whereby a Tier-I retailer , who was unable to integrate it retail outlet in the same way that comes under sub-section 9A of section 3 of the STA 1990 to pay during a tax period.
Though, it’s an adjustable tax for that period and can be reduced by 15 percent. Whereas, the 15% may be raised to 60% vide Finance Act, 2021.
However, to implement this important provision of law practice, a system-based approach has been adopted. On the other hand, all Tier-I retailers who were responsible to integrate but didn’t respond yet, with effect from July 2021 (sales tax returns filed in August 2021) will be accountable as per the procedure decided in STGO No. I of 2022 issued on August 03, 2021.
However, through the updated STGO, a list of nearly 108 identified Tier-I retailers are placed on FBR’s web portal allowing them to integrate with FBR’s system. Whereas, the procedure of exclusion from the list of 108 identified Tier-I retailers shall apply as mentioned in STGO 17 of 2022 dated May 13, 2022.
As per FBR, “upon filing the Sales Tax Return for the last month (January) 2023, for all hereby notified Tier-I retailers not having yet integrated, their income tax claim would be disallowed as above, without any further notification, creating tax demand by the same amount”.
According to FBR officials, such retailers who are liable to integrate will face a penalty of up to five hundred percent of the tax amount involved. Those retailers may also be sentenced to imprisonment which will be around two years.
Alas, the tax authorities also notified that they will also create demand for the recovery of the amount and take further legal penal actions.
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