The notifications for applicability of sales tax on transportation services would be held in abeyance by provincial governments till March 31, 2017. The aim of the whole exercise is to finalise an equitable mechanism or formula for sales tax collection on the services of inter-city transportation of POL products. The issue would be resolved between the Federal Board of Revenue (FBR) and provincial sales tax authorities regarding input tax adjustment on provincial sales tax on the services of inter-city transportation of POL products.
After thorough discussions with all the stakeholders, the following decisions have been taken:
Firstly, Sindh Revenue Board (SRB)/ Punjab Revenue Authority (PRA) would furnish their agreed stance on the issue of sales tax collection based on the origination/destination and tax nature based on single/reduced rate duly endorsed by Khyber Pakhtunkhawa Revenue Authority (KPRA) and Balochistan Revenue Authority (BRA).
Secondly, Ashfaque Tola, Legal/Tax Consultant of Oil Tankers Contractors Association (OTCA) will submit proposals for permanent resolution of the subject tax including registration of either oil tankers companies with provincial revenue authorities or OMCs, as withholding agents, latest by 15th January, 2017 to the Ministry of Petroleum and Natural Resources.
Thirdly, Ministry of Petroleum and Natured Resources would share these proposals to all the concerned stakeholders for convening a meeting by the end of January, 2017 in order to conclude the matter.
Fourthly, the provincial governments would issue necessary notification for extending the applicability of subject sales tax till March 31, 2017.
Copyright Business Recorder, 2017