FBR authorised to collect climate, petroleum levies on behalf of Petroleum Ministry

Notification amends sales tax rules to include Climate Support Levy and Petroleum Development Levy in monthly STR-7 returns

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The Federal Board of Revenue (FBR) has been authorised to collect Climate Support Levy (CSL) and Petroleum Development Levy (PDL) on behalf of the Ministry of Petroleum after issuing a notification amending the Sales Tax Rules, 2006.

Through SRO.800(I)/2026 issued on Tuesday, the FBR amended Annex-L of Form STR-7 in monthly sales tax returns to incorporate the collection of the two levies.

According to the notification, the FBR will act as a collecting agent for the Ministry of Petroleum, while the existing heads of tax collection will remain unchanged.

The Climate Support Levy was introduced through Finance Bill 2025-26 and became effective from July 1, 2025. The levy was designed as a fiscal measure aimed at addressing environmental and climate-related challenges through economic instruments.

Under the revised framework, the FBR has also introduced domestic sale invoices (DSI) for the collection of both CSL and PDL.

Sources said the changes were made to streamline levy collection procedures through the existing sales tax return system.