Saturday, 9 December 2023
Trending
List of Tier1 Retailers not integrated with point of sales system of FBR and not allowed input tax credit
UPDATES

FBR Amends Sales Tax Return Form to deny 60pc input tax to nonintegrated retailers

The Federal Board of Revenue (FBR) has brought amendment in the monthly sales tax return form to disallow 60 percent input tax credit to big nonintegrated Tier-1 retailers who have still not integrated their businesses with the FBR’s point of sales (POS) system.

In this regard FBR has issued SRO No. 407(1)/2022 Dated: March 8, 2022 to the Sales Tax Rules, 2006 for revision of the monthly sales tax and federal excise return form (STR-7).

This amendment in the sales tax return form would also allow the reversal of inadmissible input tax for the Tier-1 retailers after their integration with the FBR’s POS system. Thus, now the retailers, who get integrated with the FBR’s system, can legally claim the adjustment under the return form.

If you want to become active tax filer or want to get tax, accounting and corporate services in Pakistan then we are here to provide you professional services! Call: 0092-3334875413 | www.globaltaxconsultants.pk

By bringing this amendment the FBR has given legal cover to the reversal of the decision of the disallowance of 60 percent input tax credit to big retailers (Tier-1).

To put into effect the decision, the FBR has added two new columns, viz. 6B and 6C in the sales tax return form. Under column 6B, inadmissible input tax has been incorporated in terms of section 8B of the Sales Tax Act. Under column 6C, there is a provision of the reversal of inadmissible input tax. Subject to exclusion as provided under sub-para (II) & (III) of para 2 of the sales tax general order (STGO) No. 1/2022.

See also  PM Imran Khan never stopped me from taking action against someone: Shabbar Zaidi Former Chairman FBR

The FBR had already issued a list of 1,358 big retailers (Tier-1), who are required to be integrated with the FBR’s POS system and would be denied 60 percent input tax credit in case of non-integration by February 10, 2022.

Federal Board of Revenue (FBR) has decided to raise sales tax demand against these big retailers (Tier-1), who are still nonintegrated with the FBR’s Point of Sales (POS) system by the deadline of February 10, 2022. According to the FBR, in order to enforce this important provision of law, a system-based approach has been followed.

Definition of Tier1 Retailers under sales tax act 1990
Definition of Tier-1 Retailer under sales tax act 1990

Definition of Tier-1 Retailer under sales tax act 1990

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;

See also  FBR Appointed Asim Ahmad as New Chairman FBR

(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.

Top-Tax-Consultants-Lahore-Pakistan-Global-Tax-Consultants
Ad:

Tax.net.pk - Your Tax Experts and Consultants

Welcome to Tax.net.pk

Providing Expert Tax Services for Individuals and Businesses

About Us

At Tax.net.pk, we are dedicated to providing comprehensive tax solutions tailored to meet the needs of individuals and businesses. With years of experience in the industry, our team of tax experts is equipped to handle various tax matters, including tax planning, preparation of tax returns, and compliance.

We strive to stay up-to-date with the latest tax laws and regulations, ensuring that our clients receive accurate and reliable advice. Our commitment to client satisfaction and our in-depth knowledge of the tax landscape make us the trusted choice for all your tax-related needs.

Contact Us

For inquiries or to schedule a consultation, please reach out to us: