FBR sends warning to big retailers on POS integration as deadline looms

ISLAMABAD: The Federal Board of Revenues (FBR) on Tuesday warned of penalties to big retailers if they fail to digitally integrate their trade transactions with real-time point of sale system by August 31 deadline.

Officials said authorities have identified hundreds of big retailers who are yet to comply with a legal requirement to digitally integrate their trade transactions with real-time point of sale system.

“The FBR has reminded all the Tier-I retailers to integrate with Point of Sale (Linked Invoicing System) till the last date of August 31, 2020,” a statement said.

Officials said the FBR would issue notices to the retailers, if they remain non-compliant then the tax authorities would invoke provision of tax laws to ensure their integration.

“The FBR has warned that the last date for such integration is August 31, 2020 and afterwards those who failed to integrate would be imposed a penalty up to rupees one million and if the offence continued, the business premises of such retailer shall be sealed,” the FBR statement said.

Officials said tax authorities conducted physical survey of a number of retailers and collected information of such retailers making purchases from manufacturers and importers.

The purpose of integrating the sales and purchases is to document manufacturing and imported goods in addition to discourage practice of suppressing sales.

The registration and integration are mandatory for tier-I retailers. Previously, the FBR bounded such retailers to integrate point of sale system into their computers by December 15, 2019. In order to give an opportunity to retailers for integration, the FBR extended the last date up to March 31, 2020. The deadline was further extended to April 30, 2020 as lockdowns due to outbreak of coronavirus adversely impacted the economic activities. And later the deadline was extended to August 31, 2020.

The integration would discourage the trend of non-duty paid or smuggled goods through retailers. The FBR launched awareness and technical workshops across the country in order to convince big retailers to integrate their outlets with the FBR.

The FBR statement explained that all retailers, who have the network of chain stores throughout Pakistan, located in air-conditioned big shopping malls or plazas and their cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rs1.2 million and they are engaged in bulk import and supply of consumer good on wholesale basis to the retailers as well as on retail basis in to the consumer and their shop’s size measures one thousand square feet in area or more must integrate their retail outlets with the FBR’s computerized system for real time reporting of sales. The FBR also introduced major tax incentive for big retailers and allowed them input tax adjustment – adjustable against the output tax –who linked their sales/purchases with the FBR system.