The Federal Board of Revenue (FBR) has to give sufficient period to the importers, manufacturers, wholesalers/dealers/distributors, and wholesaler-cum-retailers of fast moving consumer goods to integrate with the FBR’s electronic sales tax (e-ST) integration system.
Leading tax expert Asif Kasbati, the PBC Core Tax Committee Member, opined that the SRO 1525-DI dated 12.12.23 cannot be applicable from December 12, 2023, i.e. date of issuance of the notification. Moreover, he questioned whether Importers, Manufacturers, and Traders purchase POS machines, can set up the software, test run the same, and implement it in just one day.
If FBR will take a stand as to applicability from 12.12.23 or even prior Official Gazette the matter, we are afraid that the matter will land in Courts, he added.
FBR notified that all FMCG importers, manufacturers, wholesalers (including dealers), distributors, and wholesaler-cum-retailers engaged in bulk import & supply on a wholesale basis to the retailers. FMCG is defined in SRO as “fast-moving consumer goods” which means consumer goods that are supplied in retail marketing as per the daily demand of a consumer excluding durable goods”.
When discussing the matter with Asif S Kasbati (ICAP Indirect Tax Convener), he highlighted that subject to certain issues, expansion of the Electronic Invoicing requirement is for more transparency and efficiency, reduces paperwork, enhances accuracy, and curbs tax evasion.
This is a pivotal step toward a more digitally integrated and transparent taxation system in Pakistan. As businesses adapt to these changes, the move is anticipated to enhance efficiency, reduce tax evasion, and contribute to the broader goal of fostering a business environment that is conducive to growth and compliance.
On asking questions as to the scope of the FMCGs, he correlated that matter with Income Tax wherein the matter has been covered in detail for a few years the definition is the same; while excluding durable goods was later added. As per section 2(22A)of the Income Tax Ordinance, fast-moving consumer goods mean consumer goods that are supplied in retail marketing as per the daily demand of a consumer excluding durable goods.
