Budget Wishlist: Oil & Gas

What FICCI, R S Sharma, Chairman and managing director, ONGC and Rahul Garg India Leader for Oil & Gas Practice, PwC

CEO-SPEAK: R S Sharma, Chairman and managing director, ONGC 

Widen tax incentives
Tax Holiday u/s 80-IB(9) is available to exploration & production (E&P) companies for seven years from the year of commercial production while tax holiday to other infrastructure sectors such as power generation and distribution companies is for 10 years out of the first 15 years. 

In the initial seven years, owing to setting off of a large initial expenditure, profits eligible for the holiday are less than what would arise on an even amortization of expenditure. The government should extend this to 10 years. E&P companies to be exempted from Service Tax on input services on exploration 

CHAMBER SPEAK
FICCI
There should be a tax holiday for undertakings engaged in commercial production of mineral and natural gas for all past and future rounds. Currently, this incentive is available to blocks licensed under the eighth round of NELP which commenced production on or after April 1, 2009. Declared goods status should be granted to ethanol and natural gas. 

EXPERT VIEW
Rahul Garg
India Leader for Oil & Gas Practice, PricewaterhouseCoopers 

The budget has an opportunity to resurrect investor sentiments in the two critical areas of gas pipeline infrastructure and upstream exploration by doing away with ambiguity in the fiscal regime and licensing policies. The government should allow true economic value of fuels to reflect in prices of transport and domestic fuels and target subsidies to the deserving in the interest of financial and environmental health.