FBR to go after foreign food chains to deploy online invoicing system

KARACHI: The Federal Board of Revenue (FBR) has decided to go after foreign food chains to integrate them with the point of sale system to raise due taxes, sources said on Saturday.

The sources at the Regional Tax Office (RTO)-II Karachi said the revenue board had circulated a list of local and foreign companies engaged in retail sales through their outlets across the country.

“Some of the major food chains, which are franchise of leading global brands are also part of the list for mandatory integration,” a senior official at the RTO said.

The notices have been sent to the international food chains to integrate their point of sales by the end of the ongoing month with a warning of sealing all the outlets, besides imposition of Rs1 million as penalty, the official added.

Notices were also sent to other local and foreign companies for compliance with the mandatory requirement under the sales tax laws.

Earlier this week the tax authority 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.

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.

Under the Sales Tax Act, 1990, a retailer having huge volume and those falling under various categories are required to link their sales and purchase record with the FBR.

The retailers, who are required to integrate their point of sales (POSs) included a retailer operating as a unit of a national or international chain of stores; a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks; a retailer whose cumulative electricity bill during the immediately preceding 12 consecutive months exceeds Rs1.2 million; a wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers, as well as on retail basis to the general body of the consumers; and a retailer, whose shop measures 1,000 square feet in area or more.

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 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 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.