FBR to Disallow 60% Input Tax Credit to Retailers Who Fail to Install POS

The Federal Board of Revenue (FBR) has issued a list of 6763 retailers (Tier-1), which are not integrated with the FBR’s Point of Sale (POS) system and would be disallowed 60 percent input tax credit in case they fail to integrate by August 15, 2021.

The FBR has issued a sales tax general order number 1 of 2021 here on Tuesday.

The FBR has also placed the list of identified Tier-1 non-integrated retailers on its website on Tuesday.

The FBR has decided to update the list on the 5th of every month and give them an opportunity to apprise the concerned Commissioner that they are not eligible to declare as Tier-1 retailers otherwise they will be disallowed 60 percent input adjustment in case of not integrating with POS.

The FBR in its drive across the country issued STGO No-1 of 2022 by which a system-based approach is being adopted to integrate nonintegrated Tier-1 with retailers with effect from August 1, 2021. A list of identified Tier-1 retailers has been placed at FBR’s web portal.

If these Tier-1 retailers fail to integrate by August 15, 2021, they would be denied credit for input adjustments equal to 60 percent claimed in the Sales Tax Returns for the month of July 2021. If, however, a Tier-1 retailer feels that it is not a Tier-1 retailer in terms of Section 2 (43A) of the Sales Tax Act 1990, it may get itself excluded from the list by applying to the Commissioner by August 10, 2021.

The list shall be uploaded by every month and taxpayers who remain in the list shall be considered as non-integrated Tier-1 Retailers and their input tax to the extent of 60 percent shall be disallowed as per the provision of subsection (9A) of section 3 of the Sales Tax Act 1990, FBR added.

Upon the filing of sales tax returns for the month of July 2021 by all notified Tier-1 retailers not integrated, the input tax claimed would be disallowed without any further notice or proceeding, cresting a tax demand of the same amount, FBR warned.


Source: Pro Pakistani

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