The income tax department on Monday exempted public sector oil refinery projects from the recent Budget provision on oil exploration and refining. The Budget had limited the seven-year tax holiday provided to commercial production or refining of mineral oil, exclusive of petroleum and natural gas under Section 80 IB of the Income tax Act.
According to the new provision, the tax holiday stands withdrawn if operations begin after April 1, 2009.
Among the projects exempted on Monday, are the refinery project of Indian Oil Corporation Ltd (IOCL) at Paradip, Bharat Oman Refineries Ltd at Bina, Madhya Pradesh, HPCL-Mittal Energy Ltd at bathinda, Oil and Natural Gas Corporation Ltd (ONGC) at Ankleshwar, Gujarat, Mangalore Refinery and Petrochemicals Ltd at Karnataka, New Visakh refinery expansion project of HPCL in Vishakapatnam, mini refinery project of ONGC at Andhra Pradesh and the Panipat refinery expansion project of IOC at Panipat. Sources said the government had asked oil PSUs to send in their specific requests for exemptions.
This will be subject to the condition that the mineral oil refinery project constitutes a separate undertaking; it begins refining of mineral oil not later than march 31, 2012; and the undertaking continues to be wholly owned by a public sector company or any other company in which a PSU holds at least 49% of the voting rights, the official notification said.