Petronas to pay SST to Sarawak govt through 7 subsidiaries

State legal counsel Datuk Seri JC Fong (right) arrives at the court this morning.

By Lian Cheng and Nancy Nais

KUCHING, Aug 6: National oil giant Petroliam Nasional Berhad (Petronas) has identified seven of its subsidiaries to make payments of State Sales Tax (SST) to the Sarawak government.

The seven subsidiaries, including Petronas Carigali Sdn Bhd, are directly involved in the sale of petroleum products in Sarawak.

They would be registered as taxable persons under the State Sales Tax Ordinance 1998 before Aug 15, 2020.

The arrangement has been agreed by all parties where a Consent Order was signed and submitted to the Kuching High Court today to withdraw all actions.

Judicial Commissioner of the High Court Alexander Siew How Wai in his ruling this morning said, “upon consent by all parties consenting to the withdrawal of the action and the counterclaim as well as other terms, it is ordered that this action and the counterclaim are hereby discontinued. Enclosures 7, 10, 64 and 67 are consequentially struck out and that the parties are to bear their own costs.”

Petronas was represented by counsel Andy Tan sitting in for Alvin Chong and Sarawak was represented by Datuk Seri JC Fong.

Sarawak started imposing five per cent tax on all petroleum products in the state starting January 2019 on their share of oil revenue under the State Sales Tax Ordinance 1998.

Petronas did not pay the tax, prompting Sarawak to file a RM1.3 billion civil suit.

Petronas then filed a judicial review application against the State Comptroller challenging  Sarawak’s right to impose the sales tax on its petroleum related products.

On Monday (Aug 3), Petronas decided not to fight against the SST and withdrew its appeal at the Court of Appeal in Putrajaya against the Kuching High Court ruling that Sarawak is entitled to collect sales tax on petroleum products.

Court of Appeal judges Datuk Abdul Karim Abdul Jalil, Datuk Hadhariah Syed Ismail and Datuk Mohd Sofian Abd Razak then struck out the appeal and cross-appeal by Sarawak government.-DayakDaily