PetroMin may seek SFIO probe into RIL-BG tax issue
PetroMin may seek SFIO probe into RIL-BG tax issuebusiness Updated: Jan 21, 2015 23:57 IST
The petroleum ministry may request the corporate affairs ministry to initiate an investigation by the Serious Fraud Investigation Office (SFIO), into a likely notional income tax (NIT) evasion by Mukesh Ambani-led Reliance Industries Ltd (RIL) and its partner British Gas (BG) in the Panna Mukta and Tapti (PMT) oil and gas fields.
RIL and BG had in December 2010 gone into arbitration seeking an increase in operation costs of the PMT fields. The cost is deducted as expenses from revenues made from sale of oil and gas declaring the profit, which is shared with the government.
RIL said it will come out with a statement but did not respond till the time of going to the press.
Sources said the government’s senior advocate, Indu Malhotra, has to examine a note of the petroleum ministry that talks about a possible investigation of the matter by the SFIO.
“The ministry has been informed that both RIL and BG are claiming higher income tax deduction... The intervention of the corporate affairs ministry could be sought for an investigation by the SFIO,” said a senior ministry official.
Oil minister Dharmendra Pradhan has also sought an investigation by external intelligence agency, RAW, to see if there were any links between RIL-BG lawyers and those on the arbitration tribunal in the case between the government and contractors (RIL-BG) over the issue. RIL and BG hold 30% each in the PMT oil and gas fields.
“There are suspicions of an alleged link between those conducting arbitration (the presiding neutral arbitrator — Christopher Lau) and the solicitor firm of RIL and BG (Allen & Overy) involved in the arbitration that began in 2011.
“RAW is investigating the alleged links between the two sides... We are awaiting RAW’s report,” oil ministry sources said. “In case RAW’s report confirms any links, the government of India can challenge and question continuity of Lau as a presiding arbitrator.”