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Name Karishma Dalvi Apeksha Malekar Minal Ghate Arpita Mehta Sahil Shaik Aparajita Sawant Preeti Jain Prathamesh Khandge Rohan Powale Sushma Ghadge Bhagyashree Lanke ROLL NO 12107A0055 12107A0056 12107A0057 12107A0058 12107A0059 12107A0060 12107A0061 12107A0062 12107A0063 12107A0064 12107A0065
It will also be good for the economy, since a ballooning subsidy bill was threatening to derail overall fiscal discipline. Private oil marketing companies have invested substantially in setting up retail outlets, but due to lack of a level playing field, these assets are underutilised. The private sector operates about 2,000 outlets mostly in highways and rural India, providing direct employment to between 15,000 and 20,000 people. A level playing field for the private sector would help invigorate the local economy. The industry wants the government to remove the National Calamity Contingent duty (NCCD) on crude oil levied at 50 rupees per metric ton, which was imposed on domestic and imported crude oil in the 2003/04 budget. The levy was to provide support to relief work in areas affected by natural calamities and was supposed to have been removed the following financial year. It has put an additional burden on oil refining companies. The industry has been asking for a waiver on customs duty on import of materials such as pipes, valves, flanges and data communication systems used by oil companies for laying gas pipelines and petroleum products. A reduction in excise duty on branded high speed diesel (HSD) and motor spirit (MS) products has been sought in line with unbranded HSD/MS. Marketing of premium branded products, which help save energy and prolong the vehicles life, has virtually come to a standstill, something that is not in the interest of a nation which imports nearly 80 percent of its oil requirements. The current policy, subjecting the services consumed by E&P entities to service tax, drains a substantial part of the funds committed for exploration, reducing funds available for actual exploration activities. Crude oil/natural gas produced by E&P entities is not subject to excise duties. Hence, they cannot take CENVAT credit of service tax incurred for exploration and production of crude oil/natural gas. The government should come up with a scheme for refund of service tax paid by E&P entities on services consumed for exploration as well as production purposes. Or not charge any tax on services provided to E&P entries
Moving on further, experts also said that exploration sector also needs to be given due importance. "With PSUs making investment outside the country, government needs to encourage investment in the country itself as it would promote employment and support investment and the economy in our own front," Sharma said. Sharma added that setting prices of energy sector on order should be brought on track and said that coal needs to be denationalizes or it will become a huge bottle neck in the economy Limited coal supply creating hurdles for power sector, Sharma said, government needs to urgently de- nationalize the sector, eliminate the monopoly of Coal India and let the private players come in.
RK SINGH
Chairman BPCL
The hike, which is likely to be announced soon, will reduce our losses by Rs 300 crore. Since the hike will be marginal, it will not impact consumers.
leading to higher economic development and an increase in the GDP growth rate. India's domestic demand for oil & gas is on the rise. According to the petroleum ministry, demand for oil & gas is likely to increase from 186.54 million tonnes of oil equivalent (mmtoe) in 2009-10 to 233.58 mmtoe in 2011-12. With Nelp-VIII, the overall number of blocks brought under exploration has exceeded 200, enhancing the oil production. The development of the oil & gas sector leads to energy security, employment and welfare of the community. With the Budget around the corner, the sector looks forward to fiscal incentives that would boost the sectors capital outlay. This can extend to the hitherto untapped areas and also to those areas that have a lower probability of striking oil reserves. In addition to the optimisation of tax holiday by providing flexibility to claim it in a block of 10-15 years, a weighted deduction of, say, 150% of the actual expenses incurred in respect of exploratory cost should be provided. Further, the tax holiday available for profits from the production of natural gas from Nelp-VIII blocks should be extended to pre-Nelp and CBM blocks. The industry hopes that the application of MAT provisions would be suspended during the tax holiday period. The longstanding demand for the removal of the service tax on the services utilised by E&P companies needs to be addressed. The service tax is imposed on the input used by E&P companies, but since there is no output service tax or excise duty liability against which they can claim credit, this increases the cost burden. The industry looks forward to the declared goods status for natural gas. It would apply a lower sales tax rate on industrial goods, as against the present prevalent rate that varies from state to state between 12.5% and 20%, except in Rajasthan where 4% tax is levied. Looking at the volatile trend of crude oil prices and under-recoveries made by oil marketing companies (OMCs), the time is ripe for the government to take the right move in the sector. More so in light of the Parikh Committee report that has recommended deregulation in the pricing of transport fuel. Given the impact on inflation deregulation might have, it would have to be blunted by the right set of monetary policies.
India wants to reduce its dependence on oil by shifting further to gas. The petroleum ministry hopes to increase import capacity, currently at 12.5 metric tonne per annum (MPTA), including the newly commissioned Dabhol terminal with five MTPA capacity, by more than five times by 2016. Following the shale gas boom in the United States, there is a huge amount of gas available for sale in the international markets, and prices have also fallen from $16-$17 per unit to $9 to $11 for delivery on India's west coast. The last budget provided tax exemption on gas to those power companies which imported it to fuel their own power terminals. But this was impractical. There are hardly any power companies in the country which have the facilities to import gas and use it. Gas importers want a blanket exemption for all of them, so that the benefit can be passed on to consumers across sectors, be they fertiliser companies, city gas networks or other industries. City gas network also have to pay local taxes. Gas companies want a tax break to be given here as well, by categorising gas as 'declared goods' under the central sales tax act. 'Declared goods' are those
of special importance in interstate trade and commerce. Other fuels such as crude oil, liquefied petroleum gas (LPG) and coal are already categorised as declared goods.
The last budget emphasised developing the national gas grid, but differences over taxes has made progress difficult. Thus pipeline network companies such as GAIL would like tax concession to lay cross-country pipelines. They point out that telecom equipment has been getting such a concession since 2002. They are keeping their fingers crossed, hoping the finance minister will listen to them.