If you are a retailer and selling any kind of products whether consumable or of any other nature, then you may already have a POS System or wanted to learn about POS and its integration with FBR.
A POS system is significant in providing you visibility and reporting of your business sales, inventory, finance, accounts, and much more. Whenever you are performing your business operations you have to keep an eye on the components of your operations.
POS system comprises of comprehensive hardware and software components which assist you in overall management of your business functions. POS hardware is inclusive of monitor, cash draw, processing unit, bar code scanner, and bar code printing machine. Whereas on the other hand POS Software is composed of varieties of modules which includes sales, inventory, distribution and etc.
In addition to being highly useful in reporting and management of a small sized business, it is a mandatory legal requirement for a Tier-1 Retailer as defined in the Sales Tax Act, 1990 to get their POS system integrated with the online sales tax invoice system of FBR. A Tier-1 Retailer has been defined in the law as follows:
- retailer operating as a unit of a national or international chain of stores;
- a retailer operating in an air-conditioned shopping mall, plaza or center, excluding kiosks;
- a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rupees twelve hundred thousand;
- 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”;]
- a retailer, whose shop measures one thousand square feet in area or more or two thousand square feet in area or more in the case of retailer of furniture
- a retailer who has acquired point of sale for accepting payment through debit or credit cards from banking companies or any other digital payment service provider authorized by State Bank of Pakistan.
Your POS System’s integration with FBR will ensure basic three components of reporting your sales data to FBR, receiving of your printed fiscal invoice number on sales receipt and updating database for future reporting.
For you one of the key advantages of POS system integration with FBR would be that, it will help you on being a retailer to upload sale invoices and credit notes automatically to the FBR servers, and this will reduce the expenditure cost of taxation services by automatic preparation of the STR for local Tier-1 retailers.
Another major advantage enjoyed by Tier-1 Retailers who have gotten their POS system integrated with FBR is that they will benefit from adjustment of a higher rate of input tax. In case of Non- integrated Tier-1 retailers, it has been prescribed by FBR that the during a tax period or part thereof in which the retailer continues to remain non-integrated, the adjustable input tax for whole of that tax period shall be reduced by 60%.
In addition to the above, the following penalties have been prescribed by the law for non-integrated Tier-1 Retailers:
|Offence If you integrated your POS system for monitoring, tracking, reporting or recording of sales, production and similar business transactions with the Federal Revenue Board or its computerized system, conducts such transactions in a manner just to avoid monitoring, tracking, reporting or recording of such transactions, and/or issues an invoice which does not carry the prescribed invoice number or barcode or bears duplicate invoice number or counterfeit barcode; or you also support encouragement of such offence.||Penalty You shall pay a penalty of 500,000 rupees or 200% of the amount of tax involved, whichever is higher. You shall, further, be liable, upon conviction by a Special Judge, to simple imprisonment for a term which may extend to 2 years, or with additional fine which may extend to 20,00,000 rupees, or with both. Also, if you support encouragement of such offence, shall be liable, upon conviction by a Special Judge, to simple imprisonment for a term which may extend to 1 year, or with additional fine which may extend to 200,000 rupees, or with both.||Section Sub-section (9A) of section 3 and section 40C.|
|A person required to integrate his business as Tier-1 Retailer, who fails to get himself registered under the Act, and if registered, fails to integrate in the manner as required under the law and rules made thereunder.||Such person shall be liable to pay: (i) penalty of 500,000 rupees for first default; (ii) penalty of 1,000,000 rupees for second default after fifteen days of order for first default; (iii) penalty of 2,000,000 rupees for third default after fifteen days of order for second default; (iv) penalty of 3,000,000 rupees for fourth default after fifteen days of order for third default: Provided that if such person fails to integrate his business within fifteen days of imposition of penalty for fourth default, his business premises shall be sealed till such time he integrates his business.||Sub-section (9A) of section 3|