The Rajasthan government is insistent on levying a 4 per cent value added tax (VAT) on crude oil to be produced from Cairn India Ltd-operated RJ-ON-90/1 Block in the state even though industry experts feel such a levy would be against existing norms.
"This is a law. There is a 4 per cent VAT on crude oil produced as of today and the same will be applicable," CK Mathew, principal secretary, finance and policy planning with the Rajasthan government, told NewsWire18.
Crude oil falls under "declared goods" category and attracts a 4 per cent uniform VAT across the country only if it is sold within the state of production. In the case of Cairn, the crude will be produced in Rajasthan and then transported to coastal Gujarat and eventually sold to various coastal refineries.
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