Federal Government Introduces New Reporting Requirements for Oil Marketing Companies
The federal government has recently imposed new reporting conditions on oil marketing companies, aiming to enhance transparency and compliance in the petroleum industry. These new requirements mandate oil marketing companies to furnish detailed information concerning the petroleum development levy and purchasers of petroleum products in their sales tax returns.
Key Changes
A new annexure, known as Annexure L, has introduced in the sales tax returns specifically for oil marketing companies. Under this annexure, these companies obligated to provide comprehensive information related to the petroleum development levy, including the computerized national identity card (CNIC) numbers of the purchasers of petroleum products, following the format outlined in Annexure L.
Legal Amendment
The Federal Board of Revenue (FBR) has formalized these changes through an amendment to the Sales Tax Rules 2006, as per SRO 1185(I)/2023. This amendment inserts Annexure L after Annexure K in Form STR VII, in accordance with sub-rule one of Rule Fourteen of the Sales Tax Rules.
Annexure L Details
Annexure L, introduced by the FBR, outlines the process for calculating the Petroleum Development Levy (PDL) payable using HS codes for petroleum products sold through Annexure C up to the date of the product sale. Access to this information automatically enabled.
Furthermore, the document specifies that the calculation of the petroleum development levy on petroleum products will be based on the government’s notified price per liter for a specific period. It has essential for the rates of petroleum products to promptly updated to ensure accurate calculations.
Additional Information Required
Under the new reporting framework, oil marketing companies required to include various details in their sales tax returns. This includes the purchasers’ National Tax Numbers (NTN), CNIC numbers, names, and other pertinent information. Additionally, the province to which the supplier belongs, as well as the quantity of liters of petroleum products sold, must clearly stated. Furthermore, companies expected to provide information on the value of petroleum products sold, the rate of petroleum development levy per liter, and the total amount of petroleum development levy payable.
These measures aimed at fostering greater transparency and accountability in the petroleum sector and ensuring compliance with tax regulations. Oil marketing companies expected to adhere to these reporting requirements to facilitate accurate monitoring and regulation of the industry.
