Section 156A Petroleum Products
Every person selling petroleum products to a petrol pump operator shall deduct tax from the amount of commission or discount allowed to the operator at the rate specified in Division VIA of Part III of the First schedule
The tax deductible under sub-section (1) shall be a final tax on the income arising from the sale of petroleum products to which sub-section (1) applies. Provision of this section brings a petrol pump operator within the ambit of presumptive tax regime in respect of commission/discount received by him from the principal. The rate of tax is provided at 12% of gross commission/ discount.
FBR explained amendments made by Finance Act, 2014 in Circular 2 of 2014 as under:
The rate of tax to be deducted on commissioner paid by a person selling petroleum products to a petrol pump operator has been increased from 10% to 12% of the amount of payment. Withholding tax on supplies of petroleum products.— Following is an extract from FBR’s Circular No. 17 of 2004, dated July 17, 2004:
A new section 156A has been inserted through Finance Act, 2004, requiring every person to collect tax @ 10% of the amount of commission or discount allowed at the time of making sale of petroleum products to a petrol pump operator. Income tax so collected has been made full and final discharge of the Petrol Pump Operator’s tax liability. A detailed circular No 11 of 2004 dated July 1, 2004 has separately been issued.
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