AJKHC stays POS system for hotels

The Azad Jammu and Kashmir High Court (AJKHC) on Thursday suspended the Inland Revenue Department's (IRD's) move to impose the Point of Sale (POS) system on hotels and guest houses and restrained the authorities from implementing it.

The order was issued by Justice Shahid Bahar during the hearing of a petition filed by the Azad Kashmir Hotels and Guest Houses Association.

Counsel for the petitioners Barrister Kamran Ilyas Raja argued before the court that hotels and guest houses in Azad Jammu and Kashmir (AJK) have not yet been granted the status of an industry, therefore, the POS system cannot be applied to them.

He contended that the POS mechanism is primarily meant for factories, warehouses and businesses involved in the production or sale of taxable goods whereas hotels, guest houses and restaurants are service-providing entities.

The lawyer apprised the court that while taxes may be imposed on the hotel and hospitality sector under the relevant laws, the POS system does not apply to such establishments in AJK under income tax and service-sector related laws.

According to Raja, hotels and guest houses do not manufacture or sell taxable goods rather they provide hospitality and accommodation services and therefore cannot be categorised as industrial or commercial warehouses.

After hearing the preliminary arguments of the petitioners' counsel, the court suspended the IRD's orders that had made it mandatory for hotels and guest houses to install the POS system.

Meanwhile, Azad Jammu and Kashmir Hotels and Guest Houses Association Chairman Raja Ilyas Khan welcomed the AJKHC's decision, saying it had boosted the morale of people associated with the hotel and hospitality business.

He added that hotels business owners would now work harder to increase their income and contribute more taxes to the exchequer without the imposition of the POS system.

He thanked the AJKHC, saying the decision had come at a crucial time when the tourism season had already begun.