FBR – POS Integration

What Is FBR Integration With POS?

Major tax governing and collection authorities in the country such as the Federal Board of Revenue (FBR), Punjab Revenue Authority (PRA), Sindh Revenue Authority (SBR), Baluchistan Revenue Authority (BRA), and Khyber Pahttp://e.fbr.gov.pk/khtunkhwa Revenue Authority (KPRA) have to move towards digitization of real-time general sales tax invoice. This is to only facilitate citizens with Online FBR POS Integration and know where the tax money is being paid to the government or not, through a real-time mobile app. This mobile application is called Tax Asaan, which is available to download for Android and iOS mobile users.

Federal Board of Revenue (FBR) has also introduced a state-of-the-art new Electronic Device System (EDS) that will allow small retailers, medium retailers, and large tier 1 retailer to report their sales in real-time for taxation purposes. Now, to make sure the sales tax amount paid by the customers at the POS counter and GST at the cash counter is actually deposited in the FBR. Subsequently, FBR has asked retail and wholesale businesses to get their FBR POS Integration in Pakistan.

Who Is Required To Integrate POS With FBR?

All retailers are required to integrate their POS invoicing system with FBR’s computerized system. ‘Tier-1 retailer’ are businesses falling in the following categories:

  • A retailer operating as a unit of a national or international chain of stores
  • A retail business operating in an air-conditioned shopping mall, or a shopping plaza or shopping center, but not including kiosks.
  • A retailer whose aggregate electricity bill during the past twelve consecutive months exceeds Rs.12000
  • A wholesaler -cum- retailer, involved in bulk import and supply of consumer goods on a broadly wholesale basis to the retailers as well as on retail basis to the general consumers.
  • A retailer, whose shop measures 1000 square feet in area or more

Why is FBR integration compulsory for retailers, restaurants, e-commerce, and retail headquarters?

Actually, it was announced by the government that effective from 1st of December, 2019 POS Integration will be mandatory for all retailers. Consequently, all cafes, restaurants, e-commerce, shopping malls, retail brand outlets, hypermarkets, chain stores, hotels, and snack bars will be required to get POS Retailers Integrated with FBR Services. The web application will connect the POS cash machine with the FBR through Electronic Device System in real-time. It will also provide a synchronized report of general sales and tax payments followed by sales tax on restaurant food in Pakistan and on bakeries.

Also, it is significant to mention that FBR has amended Sales Tax Rules 2006 to make the deployment of the POS Integration with FBR System mandatory for all tier-1, tier-2, and tier-3 retailers. As per a report published in one of a leading English newspaper daily, the Federal Board of Revenue (FBR) said it aims at FBR Integration of POS with more than 60,000 outlets and retail businesses at the point of sale till June 2020 to bring them into the tax net.

However, it appears that all retailers, not just small or big, will have to install the FBR POS invoice software. Earlier in October, FBR Chairman Mr. Shabbar Zaidi reportedly suggested that FBR was also considering Bakeries’ POS Integration with FBR and Restaurants POS Integration with FBR. Moreover, installing a point of sale invoicing system in all big private hospitals for proportionate General sales tax collection will also be implemented.

Since this enforced real-time FBR Integration of POS is by the Pakistan Government, it greatly impacts both retailers and customers. Reach out if you are a restaurant or a retailer or an e-commerce business owner looking forward to knowing how to integrate with FBR or looking for consultancy for FBR POS Support.  

FAQ’s

Is FBR integration mandatory only for retailers of textile and footwear items?

FBR to POS integration is compulsory for all retailers, irrespective of the items they are selling or dealing in. All retailers across Pakistan, whether they are dealing in footwear, textile or grocery, or leather items, or any other items are required by Pakistan law to integrate their POS systems with FBR’s system.

Is there a penalty for Xcentric for sale skimming in the software provided to the retailer?

Any software house or person who supports or schemes with the retailer in the concealment of sales or non-reporting of sales may also be sentenced to imprisonment for a term of 12 months, along with a penalty up to PKR 200,000. Software vendors providing FBR integration, for flicking through in the software shall be subject to these penal provisions.

Should Online Sales of a retailer also be reported to FBR?

For online sales, the retailers should integrate the utility provided by FBR in their website. They should ensure that the online sales are also reported to FBR. Moreover, the FBR invoice number and QR code are also printed on the invoice generated and mailed to the online customer.

Are bakeries, sweet, and meat shops also required to integrate their POS with FBR?

All those retailers, whether manufacturers or not, who sell any sort of goods to the general public for consumption, are retailers as provided in clause (28) of section 2 of the Sales Tax Act, of 1990. Consequently, bakeries, meat shops, confectionaries, and sweetmeat shops, selling goods to the public are also categorized as retailers. Hence, such bakeries and sweetmeat shops, whether they are manufacturers or not, shall be treated as retailers shall be accordingly required to integrate their POS system online with FBR.

Are all restaurants required to integrate their POS with FBR?

Yes, it is binding for all restaurants to integrate their POS with FBR. Chapter 16-A of the Sales Tax Rules of 2006 applies to cafes, coffee places, restaurants, snack bars, etc. All such businesses, whether or not falling in the category of retailers, are needed to integrate their POS systems with online FBR systems.