if your sale is equal to 8 millions annually than you have to register for STRN otherwise we can skip it, is it true?

Question

Hi i want to know courier companies are asking us to provide registered Business name, NTN and STRN, On social media e-commerce influencers are saying if your sale is equal to 8 millions annually than you have to register for STRN otherwise we can skip it, is it true?

Answer 1

Based on the current sources, certain online sellers are exempt from the requirement to register for a Sales Tax Registration Number (STRN).

Specifically, this exemption applies to online sellers who are:

• Retailers.
• Not categorized as "Tier-1 retailers".
• Required to pay sales tax through their monthly electricity bills under sub-section (9) of section 3 of the Sales Tax Act, 1990.

Explanation:

The sources state that any person selling digitally ordered goods from within Pakistan through an online marketplace, website, or software application must apply for sales tax registration, unless they are already required to pay sales tax through their electricity bills under sub-section (9) of section 3.

Sub-section (9) of section 3 clarifies that sales tax is charged from retailers, other than those falling in Tier-1, through their monthly electricity bills.

Therefore, online sellers who meet the criteria of being a retailer and not a Tier-1 retailer are the ones exempt from a separate STRN registration for their online sales, as their sales tax liability is covered by the collection mechanism through their electricity bills.

Definition of a "Tier-1 retailer" A "Tier-1 retailer" includes, but is not limited to, a retailer who:

• Operates as a unit of a national or international chain of stores.
• Operates in an air-conditioned shopping mall, plaza, or center (excluding kiosks).
• Has a cumulative electricity bill exceeding Rupees 1.2 million during the immediately preceding twelve consecutive months.
• Is a wholesaler-cum-retailer involved in bulk import and supply of consumer goods on both wholesale and retail bases.
• Has acquired a point of sale for accepting digital payments.
• Whose deductible withholding tax under section 236H of the Income Tax Ordinance, 2001, has exceeded Rs. 100,000.

In summary, online sellers who are retailers and do not meet any of the criteria to be classified as a Tier-1 retailer are exempt from STRN registration for their online sales, as their sales tax is collected via their electricity bills.