All tier-1 retailers are required to integrate all their POSs with FBR’s computerized system.
All tier-1 retailers are required to integrate all their POSs with FBR’s computerized system. ‘Tier-1 retailer’ is defined in section 2(43A) of the Sales Tax Act, 1990, to be a person who falls in any of the following categories:
(a) a retailer operating as a unit of a national or international chain of stores;
(b) a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks;
(c) a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rupees twelve hundred thousand;
(d) a wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers”; and
(e) a retailer, whose shop measures one thousand square feet in area or more.
What will be the rate of sales tax for items sold by the Tier 1 retailers Integrated with Point of Sales system of FBR ?
The rate of sales tax for items sold by integrated retailers shall be the same as for all other suppliers as provided under the Sales Tax Act, 1990. Only exception is for locally manufactured textile and leather items, which if sold by integrated retailers are subject to concessionary rate of 14%, and if sold by any other supplier are subject to 17% standard sales tax. Category-wise rates for items sold by integrated retailers is as below:
| S.NO | Item category | Rate of sales tax | Examples |
| 1- | Items falling in Sixth Schedule to the Sales Tax Act, 1990 | Exempt i.e. no sales tax to be charged | Milk, rice, wheat flour, pulses, fruits & vegetables (except canned and packaged), uncooked meat, poultry, eggs, stationary items, medicines, laptops and personal computers etc |
| 2- | Items falling in Eighth Schedule to the Act | Reduced rate as provided in the Schedule | Dairy items other than milk, fatfilled milk (tea-whitener), flours other than that of wheat, if sold in retail packing under a brand name, are subject to sales tax rate of 10%; and prepared products of meat or meat offal, if sold in retail packing under a brand name, are subject to sales tax rate of 8%; Precious jewellery at 1.5% of value of gold, plus 0.5% of value of diamond, used therein, plus 3% of making charges |
| 3- | Finished fabric, and locally manufactured finished articles of textile and textile made-ups and leather and artificial leather (See S. No. 66 of Table 1 of Eighth Schedule) | 14% | Locally manufactured Garments, shoes, bags, made-ups etc of textile, leather and artificial leather |
| 4- | Mobile phones and satellite phones | Under Ninth Schedule, sales tax is to be paid by the importer and manufacturers only. No sales tax to be charged on subsequent supplies. However, suppliers may pass on the burden of sales tax charged on their purchases in their selling price. | Mobile phones and satellite phones |
| 5- | Items not covered above | Standard 17% | Items in Third Schedule except fertilizers, imported textile and leather items, electronic items, watches, sugar, hardware, sanitary ware, kitchenware, toys, furniture, sports goods, surgical instruments, crockery, plastic products, imitation jewellery, etc |
Tier 1 Retailers | FBR List | FBR | Federal Board of Revenue | Tier 1 Retailers Registration | Rate of Sales Tax | Third Schedule of Sales Tax Act 1990 |
