FBR urged to facilitate retailers

LAHORE:President and Founder of Friends Economic & Business Reforms (FEBR) and former vice-president of the Lahore Chamber of Commerce and Industry, Kashif Anwar, urged the Federal Board of Revenue (FBR) to facilitate the retailers who have one shop.

Talking to a delegation of retailers, Kashif Anwar said that the FEBR was for documentation and wanted that tax base & revenue should increase by bringing those who are not in the tax net and identify those who do not file their tax returns.

He said that FBR has to provide more and more facilitation to filers and distinguish them from those who are not registered. Our discussion is not to criticise any law but as an institution, it is our desire that such rules & regulations should be revisited whose applicability in practical is difficult for any person, community or group of persons. The same is in the case with some categories of Tier-1 retailers such as area, amount of electricity bill and condition of air-conditioned mall, he said. Kashif Anwar said that section 3 of Sales Tax Act 1990 is the charging section. It envisages levy of Sales Tax on taxable supplies by a registered person in the course of taxable activity. It does not mention of any area specified measurements. Further, law has created discrimination amongst the retailers paying sales tax through electricity bills and Tier-I retailers through POS integration.

Tier-I retailers have not been defined keeping in view the business dynamics and inflationary trends particularly increasing cost of electricity. The conditions of electricity units consumed need to be preferred instead of cost of electricity, he added.

He said stakeholders have some concerns which increase the cost of doing business, create discrimination among retailers from those who fall in any of the category of Tier-1 retailers for POS integration and make their businesses impractical that leads to their closure and job loss.

He said that in Sales Tax Act, there is no defined turnover limit that restricts a retailer to get them registered in sales tax. The qualifying condition of 1000 sq ft area for POS integration for all retailers not keeping in view of any other criteria is not justifiable and practical.

He said that a retailer whose area is more than 1000 sq ft could not compete with the retailers whose area is less than 1000 sq ft as he has to charge sales tax from the customers after value addition. However, a retailer who is not registered, his price will be straight forward less than 17pc.

He said that how it will be evaluated that turnover of those retailers whose area is less than 1000 sq ft would not exceed the turnover of those retailers whose area is more than 1,000 sq ft so they can also qualify for POS integration.

Kashif Anwar said that a retailer who is not eligible for POS integration will simply pay annual income tax as per normal profit & loss calculation or pay minimum tax as per applicable turnover rate.

On the contrary, a retailer registered in POS integration will pay sales tax as per sales tax act with complete documentation and also has to pay income tax as per income tax law. He said that the registration should also be stopped of retailers who have small shops in air-conditioned malls until their shop areas are redefined with the condition of a shop in air-conditioned mall.