FBR sets digital invoicing rules for 13 oil and gas firms

The Federal Board of Revenue has set out a digital invoicing procedure for 13 oil and gas exploration and production companies, spelling out how joint venture partners will report sales and connect their invoices to the tax authority's computerised system.

The arrangement applies to sales tax returns for December 2026 onwards under Sales Tax General Order No. 36 of 2026, issued on November 13.

According to the order, the procedure responds to difficulties exploration and production companies face in meeting electronic invoicing requirements, particularly where crude oil and gas operations run through joint ventures under Petroleum Concession Agreements.

Each joint venture partner must issue a digital invoice for its own share, based on the invoice issued by the operator of the concession or lease. Non-operating partners may also submit or upload sales tax invoices that the operator issues on their behalf. Those invoices will pass through the FBR system, which generates a unique invoice number and QR code for each.

Operators can keep issuing commercial invoices under their existing contractual obligations and operational arrangements, while individual partners meet the digital sales tax reporting requirement.

The order states that digital invoices must be issued on or before the date the monthly sales tax return is submitted. Companies can pull parked invoices from their digital invoicing dashboards and move them into Annexure C of the return before filing. They can also delete or amend invoices already reported in Annexure C, provided the change is made before the monthly return is submitted.

The 13 companies named are Oil and Gas Development Company Limited, Pakistan Petroleum Limited, Mari Energies Limited, Pakistan Oilfields Limited, Government Holdings (Private) Limited, MOL Pakistan Oil and Gas Co. B.V., Polish Oil and Gas Company, Khyber Pakhtunkhwa Oil and Gas Company Limited, United Energy Pakistan Limited, Orient Petroleum Inc., Prime Global Energy, Saif Energy Limited and Al-Haj Enterprises Limited.

The FBR issued the order under Section 55 of the Sales Tax Act, 1990, read with the relevant provisions of Section 23, which govern electronic invoicing and integration with the board's computerised system. The notification also refers to Chapter XIV of the Sales Tax Rules, 2006, including amendments made through SRO 69(I)/2025 and SRO 1852(I)/2025, which set up the digital invoicing framework for registered taxpayers.

Profit reported that the procedure gives companies working under joint venture arrangements a way to meet the digital invoicing requirement without changing their existing commercial invoicing responsibilities.