FBR makes it mandatory for large retailers to link invoicing systems by December 1st

According to the FBR notifications, if the retails fail to link their tax systems with FBR, they will not be entitled to a 14% sales tax reduction.

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The Federal Board of Revenue (FBR) has made it mandatory for big retailers to ensure that point-of-sale invoicing app is installed into their systems by 1st December. This has been made compulsory to report turnover with the tax authorities on a real-time basis.

According to the FBR notifications, if the retails fail to link their tax systems with FBR, they will not be entitled to a 14% sales tax reduction. The FBR, in the SRO (statutory regulatory order), has made it compulsory for the tier-1 retailers to assure real-time reporting of their invoicing to FBR from December 1, 2019 onwards.

The tax revenue collection body had issued an SRO (1203(I)/2019) to make changes in Sales Tax Rules 2006. The changes were suggested in order to integrate sales app with the FBR, making it mandatory for the retailers to facilitate the tax payment process.

Who are the Tier-I retailers?

Tier-I retailers refer to the:

  • unit of a national or international chain of stores
  • retailers operating in an air-conditioned shopping mall
  • plaza or centre, excluding kiosks;
  • retailers whose cumulative electricity bill during the immediately preceding 12 consecutive months exceeds Rs600,000, and
  • wholesalers-cum-retailers engaged in bulk import and supply of consumer goods on a wholesale basis to the retailers as well as on a retail basis to the general body of consumers.

However, FBR has previously clarified that the retailers do not need to purchase any new machine to get linked.

“They can get linked by simply downloading an application in their existing machines”

“We have only targeted those retailers who are doing business with store chains or in big malls,” added FBR Inland Revenue Member Dr. Hamid Atiq Sarwar.

He clarified that FBR will no longer be considering the ”1,000 square feet” definition for big retailers as the sales of some small shops were exceeding millions. The system has already been in working in  4,000 outlets of 70 famous top textile and leather brands throughout the past year.


Also See: 
FBR Issued Tax Notices To 134, 848 High Net-Worth Individuals Across The Country

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