KARACHI: The Federal Board of Revenue (FBR) on Friday initiated penal action against 108 retailers, who failed to integrate their outlets with the online tax system.

The revenue board issued a list of 108 big retailers, who are mandatorily required to link their details of sales and purchases with the tax authorities through integration of the point of sales (POS) system.

The action has been taken through the Finance Act, 2019, adding sub-section (6) to Section 88 of the Sales Tax Act, 1990, under which the adjustable tax of the Tier-l retailer, who did not integrate its retail outlet during a tax period, would be reduced by l5 per cent. However, the figure of l5 per cent was raised to 60 per cent through the Finance Act, 2021.

To operationalise this important provision of law, a system-based approach has been adopted; whereby, all the Tier-1 retailers, who are liable to integrate but have not yet done so, with effect from July 2021 (sales tax returns filed in August 2021) are to be dealt with as per the procedure laid down in the Sales Tax General Order (STGO) No 1 of 2022 issued on August 3, 2021.

Through the latest notification, a list of 108 identified Tier-1 retailers has been placed on the FBR’s web portal, allowing them to integrate with the FBR’s system.

The FBR advised the retailers in the list that if they were not falling under the criteria then they would apply for exclusion from the list.
The revenue body also said that while filing the sales tax return for January 2023 by the notified retailers, who are not integrated with the online system, their input tax claim would be disallowed without any further notice or proceedings.

Besides, the tax authorities would also create demand for the recovery of the amount and take further penal action as per the law.

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