The Large Taxpayers Office (LTO) Islamabad of the Federal Board of Revenue (FBR) has imposed a penalty of Rs. 1 million each on Tehzeeb Bakers and Metro Shoes for failing to connect their retail outlets with FBR’s Point of Sale (POS) system.
Sources told ProPakistani that the POS integration is mandatory for all major retailers of the country, as prescribed under the Sales Tax Act 1990, and is used for sharing real-time reporting of sales of these retailers to FBR, and to ensure the collection of sales tax.
Metro Shoes, is a major retailer of ladies branded shoes, and bags, having around 40 sale outlets in the country spread across 24 cities of Pakistan. Tehzeeb Bakers has eight branches spread in Rawalpindi and Islamabad.
Both retailers fall under the category of Tier-1 retailers, as defined under the Sales Tax law.
Under the Sales Tax law, they were required to integrate and connect all their branches with the Federal Board of Revenue (FBR)’s integrated POS system for live monitoring and reporting of their sales. However, despite repeated notices and reminders from the tax office, they showed persistent non-compliance and failed to integrate their outlets with a computerized POS system to avoid reporting their actual sales to FBR.
Sources further informed that sufficient opportunities of hearing were given to the retailers, but the retailers failed to comply with the Tier-1 retailer requirements under the law. Therefore, a penalty of Rs. 1 million has been imposed on them under the law.
The deadline for all Tier-1 retailers in the country to connect their points of sales (POS) with FBR was August 31, 2020. However, some Tier-1 retailers have still not fulfilled their legal responsibility and are avoiding the installation of POS systems to suppress their sales and evade payment of sales tax to the national exchequer.
Sources added that penalties would be imposed on other defaulters in this category in the coming days. The business premises and sales outlets of the non-complying retailers, even after the imposition of penalty, will be sealed by LTO after the statutory period.