Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT Audit :: VAT RATES :: form 3cd :: TDS :: cpt :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
 
 
News Headlines »
 Is government tapping your phone?
 Income tax department to use analytics to look for discrepancies in bank accounts
 GST Council fails to break deadlock over indirect tax regime, next meet on Dec 11 and 12 to hammer out differences
 Invoking Writ Jurisdiction For Income Tax Matters
 How to file income-tax returns online
 How Income Tax Returns Are Scrutinised
 All About New Income Disclosure Scheme to make Demonetisation successful
 Your deposit may draw income tax notice
 Accepting payment under IDS 2016
 New disclosure scheme could see 50% tax and 4-year limit on cash use for unaccounted deposits
 Pay 50% tax on unaccounted deposits, or 85% if caught, says Modi government

Tax relief likely for oil companies
February, 26th 2007

Oil companies, who have often paid the cost of political whims on retail fuel pricing, may be in for some cheer this Budget. Forced to slash retail fuel prices barely days before the Budget in a bid to taper the surging inflation, finance minister P Chidambaram may cut excise and customs duties on fuels to help oilcos check losses.

Retail fuel prices in India have always been used as a political tool to appease the vote bank. Reduction in retail fuel prices have, therefore, got more to do with the political climate than the global crude oil prices.

The recent reduction in prices of petrol and diesel is no different. Although there has been a softening in global crude prices, the decision to reduce fuel prices has more to do with politics than economics. The rising inflation, which was at a two-year high even a week back, has become a major point of worry for the government. Slashing retail fuel prices was one of the obvious tools available to the government. But this time around, oilcos may be in for a respite.

The proposed cut in duties, which are in line with the reform process in the sector, is expected to translate into a significant drop in revenues for the exchequer. The petroleum sector accounts for almost 25% of total revenues and any cut in advalorem rates would have a sizeable impact on revenues.

The governments compulsion to slash fuel prices to lower inflation is, perhaps, the trigger for the proposal to reduce duties. Oilcos are estimated to have an under-recovery of almost Rs 50,000 crore this year. Of this, the government is expected to bear a part of the burden by doling out bonds of around Rs 20,000 crore. The balance would have to be absorbed as discounts by upstream oilcos and losses by downstream OMCs.

The government, which has resorted to oil bonds for the last three years, has taken on a major non-Budget exposure which will have to be met by consequent governments when the bonds are redeemed.

The non-transparency method applied by the government to subsidise consumers has come under criticism from several quarters. Reduction of levies will help reduce losses for the oilcos. A reduction in customs duties will also bring down protection levels and force Indian firms to be more competitive.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - About Us

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions