Federal Board of Revenue (FBR) has decided to relax a major condition for oil exploration and production (E&P) companies in budget 2019-20 regarding setting up of software mandated under SRO 678(1)/2004.
Chairman FBR Muhammad Jehanzeb Khan revealed this while briefing the Public Accounts Committee (PAC). He told the committee that the condition for the development of software by the E&P companies has no relevance now as the Web-based Customs Clearance System (WEBOC) has been implemented at ports.
After the amendment in SRO 678(1)/2004 for the E&P companies in budget 2019-20, the revised condition will be applicable prospectively instead of being retrospective.
SRO 678(1)/2004 includes the exempted machinery, materials, equipment, specialized vehicles or vessels, helicopters, pick-ups, aircraft, spares, accessories, consumables, and chemicals imported by the E&P companies, their contractors etc. from the customs duty exceeding 5 percent and the sales tax.
However, this exemption is placed only when each importer or E&P company develops software within one year and sets up an online connection with the customs authorities for regulating the imports covered under the said notification.
The committee was also informed that the director general Petroleum Concession has proposed deleting the provision of the development of software. The FBR also wants to remove the condition from the aforementioned SRO.