POS Integrated System for Tier-1 Retailers by FBR

All tier-1 retailers are requiring to integrate all their POSs with FBR’s computerized system. Because it is become mandatory by the Federal Board of Revenue (F.B.R) for live reporting of sales.
Following is the classification summarize by KRC Pakistan from Sales Tax Act, 1990 of some basic questions of retailers to understand the concept and its implementation:

Who is Required to POS Integrated ?

All Tier-1 retailers as categories below:
1. A retailer, but operating as a unit of a national or international chain of stores;
2. A retailer operating in an air-conditioned shopping mall, plaza, or center, excluding
kiosks;
3. A retailer whose cumulative electricity bill during the immediately preceding twelve
consecutive months exceeds Rupees twelve hundred thousand;
4. A wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on
a wholesale basis to the retailers as well as on retail basis to the general body of the
consumers”;
5. A retailer, whose shop measures one thousand square feet in area or more, and
6. Any other person or class of persons as prescribed by the Board.

What Will be the Rate of Sales Tax for Items Sold by the Integrated Retailers?

The sales tax rate for items sold by POS integrated retailers shall be the same as for all other
suppliers as provided under the Sales Tax Act, 1990. Because the only exception is for locally manufacturing
textile and leather items, which, if sold by integrated retailers, are subject to a concessionary rate of
15%, and if sold by any other supplier, are subject to 18% standard sales tax.

How Returns and Exchanges are Handle in the POS Integrated System?

The software employed by the retailer should be able to handle returns and exchanges. Such
software makes the necessary adjustment to sales revenue, reflecting sales
reported to FBR. So if such returns and exchanges are not properly reflecting, the retailer can
use debit/credit notes and record the same in Annex-I of the monthly sales tax return.

Should a Tier-1 Retailer also Report His Online Sales to FBR?

For online sales, the tier-1 retailer should integrate the utility provided by FBR in its website
and ensure that the sales are reporting to FBR, and FBR invoice number and QR code are printing
on the invoice generated and sent to the online customer.

What is the Disadvantage to or Penalty for Tier1 Retailers, Who Fail to Integrate Their POSs?

A tier-1 retailer failing to integrate shall be liable to the penalty of Rs. 1 million, and in the event of continuing failure, may face sealing of his premises and embargo on his sales.

Further, a disadvantage of failure to integrate, as provided in sub-section (6) of section 8B, is that the adjustable input tax of the retailer shall reduce by 15%.

What is the Penalty if an Integrated Retailer Tries to Bypass the System and Fails to Report Any Sales to FBR?

Retailers bypassing the system shall face a penalty of up to five hundred thousand rupees or two-hundred percent of the tax amount involved, whichever is higher. Such retailers may also be sentencing to imprisonment, which may be extended to two years.

Is There a Penalty for a Software Vendor Who Provides for Sale Skimming in the Software Provided to the Retailer?

Any person who abets or connives with the retailer in suppression of sales or non-reporting of sales may be sentencing to imprisonment for a term that may extend to one year and a fine of up to two hundred thousand rupees. Software vendors providing for skimming in the software shall be subject to these penal provisions.

KRC Pakistan is eager to assist you with all of the documentation required to fulfill the requirements for integrating the POS Integrated system. Our delegated team of Professionals will also be providing real-time guidance on implementation and carrying forward your monthly sales tax returns.

Beyond the guidance and assistance on your POS, we at KRC Pakistan also provide a POS Integrated systems that best serves your live sales reporting with the FBR portal.

Either you need assistance in integrating your POS with FBR, or you want to deploy a complete POS system. KRC Pakistan will love to assist you thoroughly. Get our