20,000 big non-compliant POS retailers face forcible integration, fines

KARACHI: Tax authorities have issued notices to 20,000 big retailers who failed to comply with a legal requirement to digitally integrate their trade transactions with real-time point of sale system within the deadline of December 15, officials said on Friday.

Documentation-evading retailers were informed that they not only could be fined upto one million rupees but also forcibly integrated into the online system to record their sales and purchases.

“These retailers were first identified, across the country, through surveys of markets and shopping malls and then they were sent notices asking them to voluntarily declare their sales/purchase transactions,” said an official at Regional Tax Office (RTO)-II Karachi. “The tax department had warned in new notice that their businesses would be registered into the system without their consent along with imposition of hefty monetary penalties.” Sharing real-time data of sales had been made mandatory through Point of Sale system for various segments of retailers having hefty turnovers. Under the sales tax laws, retailers operating in air-conditioned shopping malls or individual shops are required to register with tax authorities and link their sales with the FBR’s online system. Further, retailers, paying electricity bills amounting Rs1.2 million in a fiscal year, are also required to register and link their sales/purchases with the FBR system.

Badaruddin Ahmed Qureshi, chief commissioner, RTO-II Karachi said notices had been sent to non-compliant retailers for integration with the FBR’s online system within the jurisdiction of his office. “Prior to sending notices, tax officials had conducted physical surveys for the merit of retailers for integration,” Qureshi said, adding that the tax office intimated the retailers regarding the mandatory requirement before serving notices. “The tax office shall impose a penalty of Rs1 million on non-compliant retailers besides forcibly implementing linking their outlets with the FBR.”

The RTO-II Karachi through physical survey identified big retailers at shopping malls at Dolmen Mall, Ocean Mall, The Forum, Atrium Mall, Techno City, Star City Mall, Gull Plaza, Amma Tower, etc.

The tax office also pointed out big retailers in markets located in Defence Housing Authority, Karim Center, Cooperative Market, Paradise Center, Hashoo Center, Rex Center, Al Falah Market, Makki Furniture Market, and Panorama Center.

A number of retailers had installed the required infrastructure for linking their sales with the online system. On the other hand retailers having low turnover but operating in malls are resisting compliance to the FBR’s requirements.

A representative of market associations said the matter would be discussed with the FBR chairman to make amendments in the law in order to clarify the definition.

Atiq Mir, chairman, Karachi Tajir Ittehad, said the tax officials were harassing them taking advantage of the tax laws. Mir objected that a retailer operating an air-conditioned shopping mall located in posh area would have a different turnover compared with the one operating elsewhere. “The FBR-constituted market committees comprising tax officials and representative of market associations have already failed to reach an agreement in this regard.”

He said that until definitions in the laws were not changed the registration goals would not be achieved.