ISLAMABAD: The Federal Board of Revenue has been reached out by Oil companies Advisory Council (OCAC) has sought explanation whether advanced tax under the Finance Bill 2018 is collectable from distributors on the sale of particular petroleum products.
As per sources, OCAC reached out to the FBR seeking an explanation about the extent of the section 236HA of the Income Tax Ordinance 2001 which was enacted to ensure collection of tax on high-speed diesel (HSD) on ex-depot price which excludes dealers margin, reported Business Recorder.
Whilst the prices of high-speed diesel were deregulated, ambiguity remains over the aforementioned section, as OCAC believes advance tax also needs to be collected from distributors, which doesn’t conform to features of the budget announced for FY19.
As per the aforementioned section, every individual selling POL products to a petrol pump distributor or operator who isn’t permitted to pocket a commission, or a discount is bound to collect advance tax on the ex-depot sale of these products at decreed rates and this tax would be final.
During the deregulation of margins on HSD last December, the advance tax collection on the commodity was discussed with the FBR since the end price would differ and hence tax under section 156A is uncollectible.
To fill this disparity, relevant revisions were required to be made so advanced tax on HSD could be amassed using any other procedure.
Hence, OCAC sought the FBR’s clearance about the matter and wants the ambiguity to be cleared.
