Does taking card payments or having a 1,000 square foot shop still make me a Tier-1 retailer?

Neither accepting card payments nor having a shop of 1,000 square feet makes a retailer Tier-1 under the Sales Tax Act, 1990 as amended to 30 June 2026. Both tests once sat in clause (43A) of section 2, and both have been removed: the shop-size test by the Finance Act, 2023 and the card-payment test by the Finance Act, 2026.

What did the old law say?

The Sales Tax Act as amended to 30 June 2022 listed these limbs in section 2(43A), on top of the chain store, mall, electricity bill and wholesaler-cum-retailer tests:

• (e) “a retailer, whose shop measures one thousand square feet in area or more or two thousand square feet in area or more in the case of retailer of furniture”.
• (f) “a retailer who has acquired point of sale for accepting payment through debit or credit cards from banking companies or any other digital payment service provider authorized by State Bank of Pakistan”.
• (g) a retailer whose deductible withholding tax under the Income Tax Ordinance on purchases from suppliers, over the preceding twelve consecutive months, exceeded a threshold specified by the Board.
• (ga) a person supplying articles of jewellery of precious metal, excluding a person whose shop measures three hundred square feet in area or less.

Because the definition covers a retailer falling in “any one or more” of the categories, any single one of these limbs was enough.

What changed, and when?

Limb	30 June 2022 edition	30 June 2025 edition	30 June 2026 edition	Removed by
(e) shop 1,000 sq ft, or 2,000 sq ft for furniture	Present	Omitted	Omitted	Finance Act, 2023, section 5
(f) card point of sale	Present	Present	Omitted	Finance Act, 2026, section 4
(g) withholding tax on purchases above a Board threshold	Present	Present	Omitted	Finance Act, 2026, section 4
(ga) jewellers above 300 sq ft	Present	Omitted	Omitted	Finance Act, 2023, section 5
(gb) turnover above Rs. 200 million	Not present	Not present	Present	Inserted by Finance Act, 2026, section 4

Section 5 of the Finance Act, 2023 says “in clause (43A), sub-clauses (e) and (ga) shall be omitted”. Section 4 of the Finance Act, 2026 says “sub-clauses (f) and (g) shall be omitted” and inserts the new turnover limb (gb). The Finance Act, 2026 comes into force on 1 July 2026 unless otherwise provided.

What tests remain?

As amended to 30 June 2026, section 2(43A) covers:

• (a) a unit of a national or international chain of stores;
• (b) a retailer in an air-conditioned shopping mall, plaza or centre, excluding kiosks;
• (c) cumulative electricity bills above Rs. 1,200,000 over the preceding twelve consecutive months;
• (d) a wholesaler-cum-retailer with turnover above two hundred million, engaged in bulk import and supply of consumer goods;
• (gb) a retailer with turnover above Rs. 200 million, declared or worked back from advance income tax collected by suppliers;
• (h) any other person or class prescribed by the Board, which may now also exclude persons by gazette notification.

Shop size and card acceptance are not mentioned in any of them.

Worked example (illustrative figures)

Imran owns a furniture showroom of 2,400 square feet on GT Road, Gujranwala. It is a street-level building, not an air-conditioned mall. He has a bank card machine. His electricity bills total Rs. 780,000 for twelve months and his turnover is Rs. 90 million. These figures are made up.

Edition	Limbs that fit	Tier-1?
30 June 2022	(e): 2,400 sq ft is at least 2,000 sq ft for a furniture retailer. (f): card machine	Yes
30 June 2025	(f): card machine. (e) had gone	Yes
30 June 2026	None. Rs. 780,000 is below Rs. 1,200,000, and Rs. 90 million is below Rs. 200 million	No, on these facts

The showroom’s status turns on the edition in force for the period being looked at. Under the current text, only the remaining limbs, or a Board notification under (h), could make it Tier-1.

What if my shop is in an air-conditioned plaza?

Then size and card machines are beside the point. Sub-clause (b) still makes a retailer operating in an air-conditioned shopping mall, plaza or centre Tier-1, however small the shop, unless it is a kiosk.

Common mistakes

• Relying on old guidance. Many checklists still list shop area and card machines. Both limbs are gone.
• Thinking removal of the card limb ends every Tier-1 duty. A shop that fits another limb is still Tier-1, with the integration duty under the proviso to section 23(6).
• Assuming the change applies to past months automatically. The amending text does not state backward effect, and the clause does not address earlier periods.

What to check in the official text

Compare clause (43A) of section 2 across the Sales Tax Act editions amended to 30 June 2022, 30 June 2025 and 30 June 2026, and read section 5 of the Finance Act, 2023 and section 4 of the Finance Act, 2026, which made the omissions. Also check whether the Board has notified any person or class under sub-clause (h), since such a notification could bring a class of shops back into Tier-1 on its own terms. Board notifications are not held in this corpus.