Who is required to integrate POS with FBR in Pakistan 2024

Only Tier-1 retailers are required to integrate their POS with FBR. Income Tax Ordinance, 2001 has defined Tier-1 retailers. As per Sales Tax Act 1990 and FBR rules, persons selling goods to the general public (end users) are retailers.

POS is a point of sale where FBR is the Federal Board of Revenue. FBR is a premium revenue collection agency of Pakistan.

Following retail businesses are Tier-1 retailers

Under the Income Tax Ordinance 2001 and FBR notifications, the following retail businesses are Tier-1 retailers.

1. Official retail outlets of national and international brands. It also includes their chain of stores.
2. Retail franchises and authorized retailers of national or international brands.
3. A retailer who is selling in air-conditioned shopping malls, plaza or center.
4. Total electricity bill of retailers during the immediate last 12 months exceeds Rupees twelve hundred thousand (12 lac rupees). 
5. A business which imports bulk quantities of consumer goods, supplies these items on a wholesale basis to the retailers and it also sells to general end consumers as a retailer.
6. A shop, store or any retailer accepts state bank approved online payments and digital transactions, debit and credit cards.
7. A retailer that has paid advance withholding tax of rupees more than one hundred thousand (100,000/-) under sections 236G and 236H of the Income Tax Ordinance, 2001 during the last 12 months.

Responsibilities of the Tier-I retailers

Since integration of POS with FBR is a legal requirement. FBR is enforcing it actively. The taxpayers have certain responsibilities regarding the compliance with tax laws. So, such retailers should fulfill their duties written in the coming paras

1. Retailers should ensure integrated POS on all the payment counters at each outlet.
2. Their POS should function smoothly.
3. They should report to FBR and the concerned Commissioner Inland Revenue within twenty-four hours of POS facing any issue like hackers’ attack, damage, disruption, any operational failure or tampering. The retailers should also report any disruption in operation.

Conclusion

The purpose of POS integration is to end theft of sales tax and revenue. POS is ensuring transparency in collection of sales tax. FBR is encouraging taxpayers and supporting taxpayers to integrate POS. PRAL is the IT-wing of FBR and it manages databases including IT systems of FBR.

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