Withholding Tax On Petroleum Products Section 156A

Introduction

Withholding tax on petroleum products is collected under Section 156A of the Income Tax Ordinance, 2001.

Section 156A of the Income Tax Ordinance, 2001 enunciates, “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.”

Withholding Tax Rate On Petroleum Products-Salient Points

• The withholding tax will be deducted on commission or discount allowed by the petroleum product distributing companies such as PSO, Shell etc. to petrol pump operators.
• The tax deducted under this section will be final.
• Withholding tax on petroleum products will be collected at the rate of 12%.