The Corporate Tax Office (CTO) Lahore has imposed penalty of reducing adjustable input tax by 60% against 35 Tier-1 Retailers (T-1Rs) for their failure to integrate with Point of Sale (POS) system.
The Federal Board of Revenue (FBR) has authorized the field formations to impose penalty of reducing adjustable input tax for the whole of the tax period by 60% as per Sales Tax General Order (STGO) 1 of 2022. Also, they can impose penalty of Rs 500,000 or 200% of the amount of tax involved, whichever is higher to an integrated Tier-1 Retailers who tries to avoid monitoring, tracking and reporting.
Furthermore, the penalty may be one million rupees to an un-integrated for failure Tier-1 Retailers for not getting himself registered under the Act and his business premises would be sealed after 60 days of the levy of penalty.
The CTO sources said the field formations are authorized to seal business premises after imposing fine up to Rs3 million. They said the CTO Lahore was pursuing multiple Tier-1 Retailers cases for sealing of their retail outlets after their failure to respond to the penalty notices.
When asked how many retail outlets have been integrated so far, the sources said over 200 retail outlets of textile, leather and shoe manufacturers have been integrated so far while remaining 200 would be approached in the next two months. Integration of Tier-1 Retailers retailers in these three sectors would be completed by the month of March, they added.
Which Retailers should integrate with Point of Sales system of FBR?
The Tier-1 Retailers include a unit of national or international chain of stores, or a retailer operating in an air conditioned shopping mall, plaza or centre, excluding kiosks, or a retailer whose cumulative electricity bill during the immediately preceding 12 consecutive months exceeds Rs1.2 million, or 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, or a retailer whose shop measure 1000 sqft in area or more or 2000 sqft in area or more in case of retailer of furniture, and a retailer who has acquired point of sale for accepting payment through debit or credit cards from banking companies or any other digital payment service provider authorized by the State Bank of Pakistan (SBP).
Source: Business Recorder