In Pakistan, the sales tax ordinance classifies retail businesses into different tiers. Each of the tiers is liable to a certain tax rate along with other obligations. In this article, we will be discussing the following:
- What is a Tier-1 retailer?
- What are their obligations to FBR?
- Under what condition FBR can seal Tier-1 retail businesses?
- How to integrate FBR integrated POS software in Tier-1 retailers?
What Is A Tier-1 Retailer?
According to the Sales tax act 1990, the definition of a Tier-1 retailer is as follows.
- A 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 (1200,000)
- A wholesaler-cum-retailer, engaged in bulk import and supply
of consumer goods on a wholesale basis to the retailers as well as
on a retail basis to the general body of the consumers
- A retailer, whose shop measures one thousand square feet in
area or more; and
- Any other person or class of persons as prescribed by the Board
What Are Their Obligations To FBR?
FBR under the sales tax laws has made tier-1 retailers comply with the following regulations:
- Implementation of Rule 150ZEB(II) of the Sales Tax Rules, 2006:
All Tier-I Retailers are expected to maintain the highest standards of documentation, reporting, and transparency. In their endeavors to achieve such high standards, they are integrated with FBR’s IT system for real-time reporting of their economic transactions.
- It mandates that each Tier-I Retailer “must have the facility of debit
and credit card machine installed at each notified outlet and the sales through debit
or credit cards shall not be ordinarily refused.”
Under What Condition FBR Can Seal Tier-1 Retail Businesses?
FBR has strictly kept an eye on all retailers to comply with FBR integrated POS software. If any business fails to do so, they are sealing the business premises until further notice issued by FBR. FBR can seal any Tier-1 retailer under the following law:
Procedure for Sealing the business premises of Tier-1 retailers
150ZEN:
- Any person who is integrated for monitoring, tracking, reporting, or recording of sales, production, and similar business transactions with the FBR or its computerized system, conducts such transactions in a manner so as to avoid monitoring, tracking, reporting, or recording of such transactions, or issues an invoice which does not carry the prescribed invoice number or barcode or QR code or bears duplicate invoice number or counterfeit barcode or QR code.
- Any person who is required to integrate his business, but 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.
How to Integrate FBR integrated POS Software In Tier-1 Retailers?
The integration procedure of Tier-1 retailers is very simple. We have divided the whole procedure into four simple steps.
- Identify your business needs
- Search for the best POS software that suits your need
- Verify its FBR authorizations
- Implement the FBR integrated POS software
Identify Your Business Needs
The first step in integrating the FBR integrated POS software is to search for your needs. What feature does your business require? What kind of implementation plan suits your business model?
Search For The Best POS Software That Suits Your Need
After having a detailed insight check of business needs, you have searched for the best POS software that offers features that suits your business needs. The search for POS software plays a vital role in determining the future outlook of your business operations. You have to be precise and extremely analytical while searching for POS software.
Verify Its FBR Authorizations
Once you select the POS software, it’s time to check its authorization with FBR. Not every POS software in Pakistan offers FBR integration.
Implement The FBR Integrated POS Software
Once you select the POS software with FBR integration, you have to implement it in your sales operations. The implementation process includes data import, system installation, and connections with barcode readers, card readers, and cash counters.
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