PETRONAS confirmed in writing that seven of its subsidiaries, including Petronas Carigali Sdn Bhd, would pay the disputed state sales tax for petroleum products, Assistant Minister in the Chief Minister’s Department Sharifah Hasidah Sayeed Aman Ghazali said today.

Carigali, Petronas’ exploration arm, is also directly involved in the sale of petroleum products in Sarawak.

The written assurance comes following today’s move by the state government and comptroller of state sales tax to withdraw a civil suit filed against the national petroleum company over sales tax arrears from January to June last year.

The arrears, including penalties for late payment and interests, amounted to almost RM1.3 billion, according to the assistant minister.

Petronas also withdrew its counterclaim against the state government and comptroller for wrongfully imposing the SST.

Special counsel to the state government J.C. Fong submitted the consent order to withdraw all actions before Kuching High Court judge Alexander Siew How Wai when the suit came up for a pre-trial case management hearing.

At the last hearing, counsels for both parties agreed to adjourn the case management to today to enable Petronas to implement arrangements to settle the dispute amicably.

Petronas’ stand-in counsel Andy Tan told the court that since the oil company had identified seven subsidiaries making the payment, therefore, it was no longer necessary under the circumstances to pursue the action.

Hasidah said these subsidiaries identified by Petronas are in the process of being registered with the comptroller as taxable persons who would be liable for payment of SST to the state government.

The registration process should be completed by August 15. – August 6, 2020.