FBR introduces 24-hour sales reporting rule for retail giants

ISLAMABAD: The Federal Board of Revenue (FBR) has further tightened its grip on tax compliance, asking around 40,000 mega retail stores and their outlets to connect their sales data with the FBR system to report 24-hour sales, or else risk sealing of their business premises.

The revenue collector on Monday issued a statutory regulatory order (SRO) detailing sealing and desealing procedures for such violations.

There are a total 11,000 brands of Tier-1 retailers, whereas the number of their outlets has risen to 40,000 across the country. The FBR has found that these outlets take several days to share their data with it, making the tax body to amend the Sales Tax rules mandating all Tier-1 retailers to ensure connectivity of data not later than 24 hours so that their sales could be determined next day.

The FBR confronted a systematic problem when the Tier-1 retailers argued that if they purchase and sell a product at the same price it does not make any commercial sense. Secondly the sale data was not fully shared with the FBR.

According to the SRO 164 (1) 2025 issued on Monday by the FBR, the business premises would be sealed when retailer is involved in issuance of unverified invoice, and if store becomes disconnected with the FBR database for 48 hours, or invoices of the offline period are not entered in the system in next 24 hours, or the device does not keep record of invoices during the offline period. It further said that the business premises of the registered person may be sealed over any of these violations. The FBR has also notified the procedure for de-sealing of business premises of Tier-I retailers. The Inland Revenue commissioner would impose a penalty, and the de-sealing order would be issued within 24 hours of the payment of penalty and the demand created during audit. The registered person can also file an appeal.

The IR commissioner would ensure software audit through an integrator of all POS machines installed in all the branches of such retailers within three working days after de-sealing. The commissioner would ensure recording the sale during that period. The officer would further ascertain the exact quantum of under-declared sales as a result of software audit and create a demand of tax sought to be evaded.

In case of non-payment, de-sealing would be done after a month and business premises would be re-sealed after 15 days if the default continues. The IR commissioner would impose a penalty by passing an order prescribed under serial No. 25A of section 33 of the Sales Act, the FBR rules added.