The Federal Board of Revenue (FBR) is mulling to make it mandatory for different categories of integrated businesses and enterprises to integrate online with the FBR’s computer system.
FBR has issued a new rule i.e. online integration of businesses through an SRO 296(I)2020, to amend the Income Tax Rules, 2002. It has been made mandatory for service providers to install the electronic fiscal device (EFD) to record their procurement and supply transactions.
According to the FBR, online integration of businesses would be compulsory for the outlined 12 sectors:
- Hotels, motels, guest houses, marriage halls, marquees, clubs including racing clubs.
- Intercity road transporter
- Courier and cargo services
- Personal care by beauty parlours, clinics, slimming clinics, body massage centers, including cosmetic and plastic surgery by such parlours
- Medical practitioners and consultants
- Pathological laboratories, medical diagnostic laboratories, including CT Scan, M.R Imaging etc
- Hospitals or medical care centres providing medical consultation, hospitalization or any other ancillary services
- Health Clubs, gyms, physical fitness centres, and body or sauna massage centres
FBR is intending to bring services of various sectors into the tax net.
The integrated enterprises shall install such fiscal electronic device and software, as approved by the FBR, available on its website with complete technical instructions for installation, configuration, and integration.
According to the draft available, The provisions shall apply to all persons whose principal place of business is anywhere in Pakistan in case of a company.
In all other cases, where the principal place of business is within the civil limits including cantonments of districts specified in Karachi, Lahore, Islamabad, Faisalabad, Rawalpindi Multan, Peshawar, and Gujranwala.
The person shall notify to the board, through the computerized system, of all the establishments (notified establishments), from which they intend to carry on business and shall register each point of sale (POS) to activate the integration duly providing the following information:
- POS registration number (to be provided by the system)
- Name of business
- Branch name
- Branch address
- POS identification number
- Registration date.
The FBR said that no sale or service from the notified establishment shall be rendered without being recorded by the duly accredited electronic fiscal device (EFD), which means a system composed of one sale data controller (SDC) and at least one point of sale (POS) connected together, that has the specified characteristics and requirements, the FBR maintained.
The integrated enterprise shall maintain the record of all the bills and transactions made from a notified establishment and also at the notified central location. The taxpayer shall provide access to such premises as well as the specific record required to the Inland Revenue officer as authorized by the commissioner concerned.
Other provisions of the Income Tax Ordinance regarding record maintenance and access thereto, and otherwise, shall also be applicable, the FBR said.
The cost of the integration including the cost of equipment and fiscalization shall be borne by the taxpayer itself.
Online integration during the intervening period
During the intervening period till such time the board puts into operation a system of accredited secure devices and real-time communication of bills and other data as stipulated in rule, the online integration shall be considered to have been achieved, if all the conditions specified in this rule are fulfilled.
The taxpayer shall certify, using his user ID and password on the computerized system, that he shall fulfill all the requirements of this chapter as relaxed by this rule and that he shall ensure integration of all notified establishments in the manner as stipulated within one month of the date when the board declares readiness for the same through a notice sent through email or computerized system.
Such a person shall provide details of all his establishments in the manner as stipulated.
The FBR added that the taxpayer shall upload or transfer the data of all invoices or bills periodically to the board’s computerized system but the interval during such transfer shall not exceed seven clear days
Reporting of failure to transfer sale or bill data to the Board
The board shall ensure to provide a facility on its website to a customer on its website to verify and ensure that bills issued have been dully communicated to the FBR computerised system, the FBR added. And in case of non-verification, he may upload the image of invoice or the bill to the Board’s portal.
It is to be noted that the FBR has already started integration of businesses under sales tax by making installation of point of sale mandatory for big retailers, or classified as tier-1 retailers.