Tag: Sales Tax

Retailer’s POS Integration with FBR

FBR’s extension for POS integration

FBR extended the date for POS integration with FBR’s network up to August 31st, 2020. Retailers willing to integrate have to furnish in writing to respective RTOs/LTUs by August 20th, 2020.

FBR continuously working on it’s systems to enhance the effectiveness of their machinery to achieve high efficiency in documenting the country’s economy and deterring tax evasion. Same as other sector’s in Pakistan, retailer’s (as per tax practices and FBR’s intelligence) were assumed to report much understated sales than in actual to evade sales tax. For this FBR Islamabad had also done some experiments by installing their own POS on the premises of some restaurants and other retailers, results were as expected, due to that FBR last year came up with the idea of integrated POS or real time invoicing systems. This system utilizes cloud technology for real time invoicing, as soon as the retailer enters the invoice through POS, in a glimpse of a second the information will travel to the FBR’s web service and return with a fiscal invoice number and a QR code, through which customer/consumer can verify using FBR’s Tax Asaan application. 

POS Invoice
Invoice verification by TAx Aasan

This Real Time Point of Sale (POS) Invoicing System was introduced by the Federal Board of Revenue (FBR) initially for top Textile & Leather brands and was later expanded to Tier-1 retailers which include retail brands across Pakistan. 

So, What actually POS Real Time Invoice System is?

Point of Sale (POS) Invoicing System by FBR is an online and real time invoicing system which connects the computerized Sales system of retailers with the Federal Board of Revenue (FBR) through the internet.

POS Invoicing System is the computerized & electronic system installed at different outlets in Pakistan which not only generates invoices for customers but also records sales data, manages inventory and maintains customer data.

By integrating these systems, the sale will not only be recorded in the internal system of the retailer but also at the network of FBR which ensures the collection of Sales Tax.

How To Integrate with FBR’s POS Real Time Invoice System?

FBR have kept the whole process of integration very simple for the ease of retailers as there is no need to purchase new machines or equipment. Rather they can use their existing invoicing system to complete the integration.

The integration can be completed successfully in the following steps: 

  • Login to the official website of FBR using your account details
  • Select POS Client registration
  • Provide details such POS Device Number, POS version, Business address, Branch details, City, IP address, Latitude and longitude 
  • Download Software Fiscal Device & Install on your POS Invoicing system.
  • Register each point of sale at your business by the same process

Steps involved in installation of FBR POS Software:

To successfully integrate with FBR’s POS Real Time invoice system the retailer is required to install the software on all invoicing machines using the following process:

1) Download ‘Software Fiscal Device’ from the official website of FBR and run the software as administrator.

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2) Select the ‘Complete’ Setup Type and proceed

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3) Select the target folder where you want to save the local files generated by the software and enter POS Registration Number which was generated on e.fbr.gov.pk

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5) Click Finish to complete the installation

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Following requirements for Software Fiscal Device include:

  • Windows 7 or above
  • .Net Frame Work 4.5 or above
  • Internet Information System

By above measure FBR is confident that they will reduce the risk of sales tax evasion resulting in higher revenue collection. Some retailers have already installed above real time invoicing system by FBR including many international brands having outlets but still many resisting the system.

To encourage this integration of FBR’s network and retailer POS, taxation law provided concessionary sales tax rates on successful integration and penalties up to 1 million rupees on failure of integration. Continuous failure can lead to sealing of business premises with further reduction of input tax claim by 15%.

A quick summary of questions that people often ask;

Who falls under Tier-1 retailer?

Teir-1 retailer are defined by law as follows;

  • A retailer operating as a unit of national or international chains of stores.
  • A retailer operating in air-conditioned shopping malls and plaza but excluding kiosks.
  • A retailer whose electricity bill exceeds 12 hundred thousand in last the 12 months.
  • A wholesaler-cum-retailer who imports in bulk and supplies on both wholesale and retail basis.
  • A retailer whose shop measures 1,000 Sq ft. or more.

Do bakeries, milk and sweet shops also fall under tier-1 retailers?

Bakeries, sweet and milk shops sell to the general public (consumers). Therefore if they meet the beside mentioned criteria they do fall under tier-1 and have to install and integrate POS.

Are restaurants also required to integrate POS?

Irrespective, whether restaurants or cafes fall under tier-1 they are required to integrate their POS with FBR’s network.

For any business/tax consultation in Pakistan, UAE and KSA you can write to me through contact me.

Related Reading

HOW TO RETRIEVE / RESET FBR (IRIS) ACCOUNT PASSWORD

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Tax Refunds and Phishing Fraud

phishing emails

HOW TO REGISTER A COMPANY IN PAKISTAN

Tax Refunds and Phishing Fraud

“Dear Taxpayer,

You have been approved an income tax refund of Rs. 15,490/-, the amount will be credited to your account shortly. Please verify your account number 5XXXXXXX6755. If this is not correct, please update your bank account information by visiting the link below. https:// bit. Ly /3535wpyhalK87”

The above email is not from the FBR authority but it’s too late if you already clicked the provided link in the email and provided your true personal and financial information.

In the uproar and fear of taxes and accountability by Federal Board of Revenue (FBR) on the non-filling of returns, keeping benami assets (doing benami transactions) and tax evasions. Phishers are active in tricking and trapping tax payers and fillers. Although emails and mobile messages for notices, penalties and tax refunds scams are not new, it is trapping taxpayers since FBR has eased the return filling procedure and launched IRIS portal. It’s amplitude in the last two months has increased and many tax payers fallen in this trap. These emails request your personal and financial information by luring you in the name of tax refunds or scaring you by possible imposition of tax penalty.

IRIS InboxFirst of all, ‘’Never expect a tax refund message by FBR, FBR hasn’t and till date has no SOP to communicate tax refunds by mobile messages or emails”. Now coming on the emails, FBR do send emails registered for your accounts on IRIS portal and just communicate if you have received any notice in the inbox of your IRIS account, just to be sure that taxpayer is notified that he has received a notice from FBR, even full text is not shared on email and taxpayer must view his inbox on IRIS portal to read what is about.

Phishing is not new, remember “Jeeto Pakistan WhatsApp messages” of congratulating recipient for winning gold just to obtain recipient personal and banking information and login credentials. It is very important for recipients of such messages and email, without getting excited or panic just verify such messages from the authority or organization it is mentioning.

Tips for identifying and avoiding being preyed of phisher and phishing emails.

  • Number and Email address
    • Phishing emails and messages do not have proper or inconsistent email address. Albeit they keep email address to imitate original organization but if they are keenly observed then one can identify them.
  • They will not specifically address you
    • Instead they will use general greetings and will address with “Dear Taxpayers”, “Dear Sir/Ma’am” or “Dear Recipient”.
  • Compare the email address with the actual website domain of the organization.
    • Remember FBR has domain of “fbr.gov.pk” and FBR do not use any other address.
  • Never click on any link provided in the Email
    • FBR will never ask you to click any link neither will ask you to provide your login credentials of any account whether it be IRIS or you bank account.
  • Consult an advisor or consultant
    • They have awareness of the changes and recent developments in the industry.

What you should do once you are sure that it’s a trap?

Report it, report it to the authority and report it to Google so that these traps can be removed from the online web.

Report to Google through following link:

https://safebrowsing.google.com/safebrowsing/report_phish/?hl=en

Report it to National Response Center for Cyber Crime through following link:

http://www.nr3c.gov.pk/creport.php

Or at least forwards that email to FBR on:

sec.website@fbr.gov.pk

 

FBR already took serious action against these email frauds and trying to aware people through press releases.

Some phishing email samples that FBR issued in relation to this fraud are below kindly be safe and aware your friends and family.

 

 

 

For any business/tax consultation you can write to me through contact me.

Related Reading

HOW TO RETRIEVE / RESET FBR (IRIS) ACCOUNT PASSWORD

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Sales Tax Period, Input Tax, Output Tax, Supply & Taxable Supply

Sales tax period is a period of one month as specify in the sales tax act. The Federal government of Pakistan may notify some other period as tax period through notification in the official Gazette.

Input tax is the tax levied under Sales Tax Act, 1990 on the supply of goods to a person i.e. sales tax on purchases of goods . It also includes sales tax levied on import of goods by the person meaning every time a person import any plant, machinery or simple goods into Pakistan he would be charges sales tax on it at the time of clearance from custom authorities.

Third as Sales Tax Act, 1990 describes. ”in relation to goods or services acquired by the person, tax (Excise duty) levied under the Federal Excise Act, 2005 in the sales tax mode as a duty of excise on the manufacture or production of the goods, or the rendering or providing of the services.

Further any provincial sales tax levied on services rendered or provided to the person and tax levied under the Sales Tax Act, 1990 as adapted in the state of Azad Jammu and Kashmir on the supply of goods received by the person.

Summarizing above, input tax is part of;

  1. Purchases of (taxable) goods or services received.
  2. Import of goods.
  3. Fedral Excise Duty (FED) in sales tax mode on goods acquired or services received.
  4. Provincial sales tax, Sindh Sales tax on services for example.

Output tax means tax levied under sales tax act on supply of goods or rendering of services, which includes;

  1. Tax levied under Sales Tax Act, 1990 on supply of goods made by the person.
  2. Excise duty levied under Federal Excise Act, 2005 in sales tax mode on manufacturing or production of goods or rendering of the services by the person and last but not least;
  3. The provincial sales tax levied on services rendered or provided by the person.

Supply means sale or other transfer of right to dispose of goods as owner. It also includes sale or hire purchase agreement. Putting to private, business or non-business use of the goods acquired, produce or manufactured in the course of taxation activity for purposes other than those of making a taxable supply.

Auction or disposal of goods to satisfy a debt owned by a person, possession of taxable goods held immediately before a person ceases to be a registered a person and in case of manufacture of goods belonging to another person, the transfer or delivery of such goods to the owner or to a person nominated by him all above accounted as supply.

Taxable supply means supply of taxable goods other than those, which have been exempted by the Federal Government under section 13 of the said Act. It also includes a supply of goods chargeable to tax at the rate of zero percent.

Time of supply is the earlier of the time at which the goods are delivered or made available to the recipient of the supply or the time when any payment is received by the supplier in respect of that supply. Distinguishing from the mentioned rule in hire purchase agreement time of supply means the time at which agreement is entered into.

Time of supply in relation to services, means the time at which the services are rendered or provided. Note that when any part payment is received in tax period for a supply, it shall be accounted for in the return for that tax period. But where any part payment is receive in respect of an exempt supply it shall be accounted for in the return in the tax period during which the exemption is withdrawn from such supply.