Oil’s well with NELP-VII despite tax row: Govt

Oil’s well with NELP-VII despite tax row: Govt

K K SHANKAR

Posted online: Monday, May 05, 2008 at 2242 hrs IST

NEW DELHI, MAY 3
Directorate General of Hydrocarbons (DGH) officials have said that the seventh round of the New Exploration Licensing Policy (NELP-VII), which involves 24 recycled and 15 repeated blocks, has received a good response despite ambiguities about the income tax (I-T) exemption for gas production in the country. A DGH official, speaking on condition of anonymity, disclosed that around 350 data units have been sold for 57 blocks so far.

According to the information available, there are blocks for which more than 10 companies have bought data. For 24 blocks, more than five companies have shown interest and acquired data. Two to three companies have shown interest for the remaining 13 blocks.

The DGH official said, “The number of data units sold for blocks indicates the kind of interest for it among the bidders. Data for single blocks cost around $3,000.” However, he did not disclose the bids received under NELP-VII. The last date for submission of bids under NELP-VII had been extended to May 16 last month, fearing poor response in the face of the I-T exemption controversy.

Under Section 8 (IB) (9) of the Income Tax law, refineries being commissioned by March 2012 would get I-T exemption for seven assessment years. However, finance minister P Chidambaram has remained silent on whether gas production is included in the phrase “mineral oil” for the purpose of this section. The disputes on this issue are pending with various adjudication authorities. The minister wants settlement of the dispute through adjudication rather than discussions in Parliament.

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Oil’s well with NELP-VII despite tax row: Govt K K SHANKAR Posted online: Monday, May 05, 2008 at 2242 hrs IST NEW DELHI, MAY 3 Directorate General of Hydrocarbons (DGH) officials have said that the seventh round of the New Exploration Licensing Policy (NELP-VII), which involves 24 recycled and 15 repeated blocks, has received a good response despite ambiguities about the income tax (I-T) exemption for gas production in the country. A DGH official, speaking on condition of anonymity, disclosed that around 350 data units have been sold for 57 blocks so far. According to the information available, there are blocks for which more than 10 companies have bought data. For 24 blocks, more than five companies have shown interest and acquired data. Two to three companies have shown interest for the remaining 13 blocks. The DGH official said, “The number of data units sold for blocks indicates the kind of interest for it among the bidders. Data for single blocks cost around $3,000.” However, he did not disclose the bids received under NELP-VII. The last date for submission of bids under NELP-VII had been extended to May 16 last month, fearing poor response in the face of the I-T exemption controversy. Under Section 8 (IB) (9) of the Income Tax law, refineries being commissioned by March 2012 would get I-T exemption for seven assessment years. However, finance minister P Chidambaram has remained silent on whether gas production is included in the phrase “mineral oil” for the purpose of this section. The disputes on this issue are pending with various adjudication authorities. The minister wants settlement of the dispute through adjudication rather than discussions in Parliament.