Deora for infra status, service tax exemption for E&P
Deora is seeking to give a big push to domestic oil and gas hunt through a slew of fiscal incentives.india Updated: Feb 03, 2006 15:26 IST
Petroleum Minister Murli Deora is seeking to give a big push to domestic oil and gas hunt through a slew of fiscal incentives including infrastructure status to exploration and production business and exemption from service tax.
In his wish-list for the Budget 2006-07, Deora sought infrastructure status to E&P business, LNG import projects and cross-country pipelines so as to give these a 10-year tax holiday, a Oil Ministry official said.
To promote domestic E&P, he also sought eliminating servcie tax on survey and exploration of mineral.
India imports 73 per cent of its oil requirement and its energy security is largely dependant on reducing imports through increased domestic production - a task possible only when E&P business is given a new thrust.
The ministry sought nil customs duty on capital goods imported for new refineries/refinery expansion, green fuel projects, expansion of duty free list of items, exploration and production of oil and gas.
It demanded 'Declared Goods' status to natural gas so that the fuel attracts a uniform four per cent sales tax all over the country.
Sources said to cut the losses made by public sector oil firms on sale of cooking fuels, Deora demanded Declared Goods status for subsidised products attracting four per cent uniform sales tax. States currently levy sales tax ranging from 8 to 14 per cent on LPG.
Deora, within days of taking charge of the Petroleum Ministry on January 30 held discussions with Finance Minister P Chidambaran and C Rangarajan who heads the inter-miniterial committee to suggest pricing and taxation policy of petroleum products, to demand increase in government subsidy on LPG and kerosene.
Fuel retailers IOC, BPCL, HPCL and IBP reported net losses in first nine months of current fiscal. The four together reported net loss of Rs 2898 crore during April- December as against a net profit of Rs 5223 crore in the same period the previous year.
The losses assume greater proportion if the Rs 9751 crore assistance provided to retailer by upstream oil companies like ONGC was taken into account, sources said.