ISLAMABAD, June 17: The government has notified procedures for zero rating of sales tax on supplies of locally manufactured plant and machinery for petroleum and gas sectors exploration and productions companies.

According to the CBR notification, the zero-rating of sales tax would be available only to supplies of locally manufactured plant and machinery to petroleum and gas sector Exploration and Production Companies, including OGDC, their contractors and sub- contractors, subject to the following conditions, namely:

(i) zero-rating shall be allowed only in respect of such plant and machinery as is specifically recommended by the relevant Regulatory Authority as defined in Annexure-VI to the Petroleum Policy, 1994 in view of their project requirements; (ii) such companies shall at the time of purchase of plant and machinery, furnish to the Collector of Sales Tax an indemnity bond in the form at Annex-I and produce installation certificate within two years of the purchase of such plant and machinery in the form at Annex-II; iii) these companies shall be entitled to shift such plant and machinery from one project to another project site as authorized by the Regulatory Authority; and (iv) sales tax shall be payable in case such plant and machinery is sold to any unregistered person before the expiry of seven years of the purchase.