KARACHI: The Federal Board of Revenue (FBR) has slapped at least Rs47 million penalties on retailers who couldn’t give the tax authority real-time access to their sale invoice systems by the deadline, it was learnt on Tuesday.
The FBR launched penal action against retailers, who failed to integrate point of sales (POS) with the tax online system, within the given deadline.
“At least 47 notices have been sent to big retailers with monetary penalty of Rs1 million each with a warning of further harsh action in case of continuous non-compliance,” said a senior official at the Regional Tax Office (RTO) Karachi.
The FBR set August 31 as a revised deadline for retailers to digitally integrate their businesses under Sales Tax Act 1990.
The official said in case the retailers remain non-compliant to the notices the FBR would take action to seal their businesses and put an embargo.
The official said the RTO Karachi issued notices to retailers engaged in business of retail chains, cosmetic and clothing shops that were identified during a survey conducted by the tax office in the past.
In 2017, the FBR decided to bring big retailers into the sales tax net to prevent tax revenue leakages and identify potential taxpayers engaged in sales and purchases.
A new clause (43(A)) was added into the section 2 of Sales Tax Act 1990 to define tier-1 retailers, who are required to integrate their businesses with the FBR.
Under the law, a retailer / wholesaler operating as a unit of a national or international chain of stores, operating in an air-conditioned shopping mall, plaza or centre – excluding kiosks – whose cumulative electricity bill during the immediately preceding 12 consecutive months exceeds Rs1.2 million, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to consumers or having a shop that measures 1,000 square feet in area or more is required to integrate with the online tax system.
The official said the FBR is granting date extension to the retailers for the last two years. However, the retailers did not show willingness to link their invoices with the tax authority.
Nazir Ahmed Shoro, chief commissioner Inland Revenue of RTO Karachi directed the office to speed up the process of issuance of notices to other identified retailers to bring maximum number taxpayers into the sales tax net, according to the officials.
Besides, the FBR has introduced business integration under income tax laws, which will help the tax authorities to monitor and examine incomes of retailers and wholesalers.
The government set a very challenging task of increasing tax revenue by 28 percent year-over-year in the current fiscal year.
