No rest for BG in $236m tax row

Vol 18, PW 23 (16 Jul 15) News in Brief

Gujarat's state government is set to challenge a Gujarat High Court decision which says the Panna and Mukta fields are in an 'exclusive economic zone' and that operators BG, Reliance and ONGC cannot be charged sales tax.

Gujarat officials submitted a Special Leave Petition (SLP) on July 15 to the Supreme Court of India. "I think the Supreme Court will accept the Gujarat government case," says a source.

"Generally it accepts cases filed by the government." Gujarat took Rs1500cr ($236m) as sales tax over 1997-2001 from the PMT consortium arguing it sold gas to GAIL inside Gujarat. But BG, Reliance and ONGC challenged this in the Gujarat High Court and won the case in May 2015.

The court ruled the money should be returned to the consortium. It also stated that Article 1.27 and Article 21.5.13(a)(iv) of the PSC define 'delivery point' at the wellhead and not at the end customer's location.

Gujarat argues that though the fields lie offshore they fall in the state's territory.