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Withdraw customs duty on capital goods: HPCL

india Updated: Nov 05, 2006 19:24 IST

Hindustan Petroleum (HPCL) has urged the government not to impose customs duty on capital goods it needs to import for its proposed new refineries in Bhatinda, Bina and Paradeep.

HPCL has pointed out that this concession had previously been made for Reliance Petroleum Ltd.

Under the present duty structure, the capital goods imported face a total of 27.48 per cent duty.

HPCL has also suggested that the entire concessional duty structure for setting up of new refineries be extended to imports related to pipeline projects for transportation of crude and petroleum products as well.

At present, capital goods imports under these projects attract a 33.65 per cent duty.

"In view of the heavy capital cost of inland refineries owing to the port infrastructure and pipeline facilities for receipt and transportation of crude, the concessional customs duty as applicable to the new refineries should be extended also for the port and allied facilities for receipt, storage and transportation of crude," it stated in a detailed note to the Petroleum Ministry.

HPCL also wants the customs duty protection on diesel and petrol raised to 10 per cent from the present 2.5 per cent.

"With the current rate of customs duty on crude at five per cent and on petrol and diesel at 7.5 per cent, there is a duty protection of about 2.5 per cent which needs to be enhanced. This may not be adequate to take care of refining and marketing costs, and the time-lag for the increase of import parity price of crude vis-a-vis the products," the company has contended.

Email Author: djoshi @hindustantimes.com