Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
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) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: ACCOUNTING STANDARD :: TDS :: Central Excise rule to resale the machines to a new company :: empanelment :: VAT RATES :: VAT Audit :: due date for vat payment :: cpt :: ACCOUNTING STANDARDS :: form 3cd :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ARTICLES ON INPUT TAX CREDIT IN VAT :: list of goods taxed at 4%
 
 
« News Headlines »
 Can the filling of GSTR-3B be avoided by filing GSTR-1, 2 & 3?
 CII seeks extension of time for filing GST returns
 A tax saver scheme with higher returns
 GST registration mandatory for TDS entities
 Govt rules out extension for filing GSTR-3B returns after December
 Tax department’s e-filing portal out of action for 2 hours
 Use ITR-2 to show salary and capital gains income
  TDS Applicability On Government Contracts Under Gst (Under Section 51 Of The Cgst Act, 2017)
  How to file ITR for FY 2016-17 and all the links you need
 All about E-way Bill under GST
 Good and simple tax: on the GST regime

Tax incentives unwarranted further
June, 12th 2009

There's needless controversy over tax liability in the upstream hydrocarbon sector, specifically relating to natural gas production. The extant fiscal regime as per the new exploration licensing policy does provide generous tax benefits to shore up investment in the high-risk exploration and production (E&P) segment. The issue now is whether a further tax incentive is warranted, so as to make corporate income from gas production tax exempt. Note that the budget last year did provide for a tax holiday on crude oil production.

Extending the tax exemption to gas would be logical, its argued. But two wrongs do not make a right. Theres simply no case for corporate tax exemption for gas production. Gas prices for the new hydrocarbon finds in the Krishna-Godavari basin are now market-determined, and theres no reason why income tax liability ought to be absolved. Theres also a sound case for phasing out the income tax holiday on oil production.

Whats surely required is a reasonable tax structure across the board in the oil & gas sector. Instead, we have perversely opted for generous tax holidays for oil refining, which is now proposed to be extended to hydrocarbon production.

We clearly need to rationalise both direct and indirect taxes in petroleum. The move to provide income tax holiday for gas production needs to be nipped in the bud. Anyway, the attendant provisions in the licensing policy do provide for tax deductions of E&P expenses and costs, which are as per global best practices. The budget last year did extend the tax holiday for oil refineries up to 2012, but we need to do away with such give-aways.

It makes no sense to prop up capital-intensive refineries with huge tax benefits. In the nineties, capital goods imports for refineries were also made duty free. As for petro-products, indirect taxes can add up to half the retail price which is perverse incentive to adulterate fuel. Thankfully, the indirect levies were reduced last year on an ad-hoc basis given the sharp spurt in global crude prices. We do need to firm up a rational tax policy in oil & gas without further delay.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 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