The Federal Board of Revenue (FBR) has notified a list of 89 unregistered retailers (Tier-1), who are required to be integrated with the FBR’s Point of Sale (POS) system by December 12, 2022.
The FBR issued Sales Tax General Order (STGO) 5 of 2022, on Thursday. According to the notification, these 89 identified retailers are still operating out of the documented regime and not depositing collected sales tax from consumers into the national kitty.
Last month, the FBR issued a list of 85 big retailers (Tier-1), which are required to be integrated with the FBR’s POS system and were denied a 60 percent input tax credit in case of non-integration.
The number of big retailers now stands at 89, which are required to be integrated with the POS system. The board has decided to raise sales tax demand against these big retailers (Tier-1), who are still not integrated with the FBR’s POS system by the deadline of December 12, 2022.
Upon the filing of the sales tax return for the month of November 2022 for all hereby notified Tier-I retailers not having integrated, their input tax claim would be disallowed, the FBR stated.
The Finance Act, 2019 added sub-section (6) to section 8B of the Sales Tax Act, 1990 (“the STA, 1990”), whereby, a Tier-l Retailer “(T-1R)” who did not integrate its retail outlet in the manner prescribed under sub-section (9A) of section 3 of the STA, 1990 during a tax period, its adjustable tax for that period would be reduced by 15 percent. The figure of 15 percent has been raised to 60 percent vide Finance Act, 2021.
In order to operationalize this important provision of law, a system-based approach has been adopted, whereby, all T-IRs who are liable to integrate but have not yet integrated, with effect from July 2021 (Sales Tax Returns filed in August 2021) are to be dealt with as per the procedure laid down in STGO No I of 2022 issued on 3rd August 2021.
The procedure of exclusion from this list of identified Tier-I shall apply as laid down in STGO 17 of 2022 dated May 13, 2022, the FBR added.