Hardy's plea for Rs50 tax exemption finds favour with ministry

Vol 7, PW 11 (13 Aug 03) News in Brief
     

India's oil ministry has extended its support to Hardy Exploration in its request for exemption from a Rs50 per tonne tax - proposed in this year's budget - imposed on domestic crude oil to pay for 'national calamity contingent duty'.

Shastri Bhawan bureaucrats agree with Hardy's position that imposition of this tax will disturb the 'fiscal stability clause' in the PSC for Hardy's PY-3 oilfield. "The imposition of this levy will affect the contractual provisions of the PSC," wrote Shastri Bhawan last month.

"If the duty is paid by the contractor, the profit petroleum of the contractor parties as well as the government will reduce."Shastri Bhawan proposes an alternative to the tax where authorities recognise as 'cost recoverable' the Rs1.07cr that will be raised every year by way of this tax from the 214,716 tonnes of crude PY-3 produces every year. To further clarify matters to the tax collecting authorities, Shastri Bhawan suggests that block CY-OS-90/1 (in which PY-3 sits) should be included in the relevant 'central excise notification' thatmarks out oil and gasfieldsenjoying similar fiscal stability.