ISLAMABAD: The Federal Board of Revenue (FBR) has issued recovery notices, amounting multibillion rupees related to income and sales tax to Shell Pakistan Limited.
The financial statement of Shell Pakistan Limited for the nine months period ended September 30, 2021, the company received a demand order from the tax authorities in respect of the tax year 2017, amounting to Rs1.29 billion.
The demand principally arose due to disallowance of the technical fee and other associated company payments, as well as disallowance of depreciation on dealer operated retail sites.
Further, the tax assessing officer also disallowed the credit for minimum tax amounting to Rs533.28 million paid in earlier years along with the disallowance of outstanding liabilities, which have been unpaid for more than three years.
The company, in response to the order, filed an appeal with the Commissioner Inland Revenue (CIR) Appeals where the matter is pending.
“The company based on the merits of the aforementioned matter and as per the advice of its tax consultant, expects a favourable outcome and accordingly no provision has been made in this respect in these condensed interim financial statements.”
Shell Pakistan Limited also encountered an issue related to sales tax. During the year, Deputy Commissioner Inland Revenue (DCIR) finalised the audit for the financial year ended 2018 and raised a demand of Rs2.64 billion, primarily disallowing the input tax adjustment on zero-rated supplies of jet fuel to international flights, inadmissible input tax adjustment and disallowance of discount given to the customers.
The company being aggrieved, filed an appeal with the CIR Appeals. The CIR Appeals has granted a stay till October 13, 2021, according to the financial statement of the company.
