The announcement came at an interactive session organised for the round even as the last day for submission of bids has been pushed from April 11 to April 25.
NEW DELHI: While the interpretation of Section 80-IB of the Income-Tax (I-T) Act for the oil and gas sector has still not become clear for the industry, the ministry of petroleum and natural gas on Monday said that it would press for getting a clarification from the ministry of finance on it before the close of bidding for the seventh round of New Exploration and Licensing Policy (NELP).
The announcement came at an interactive session organised for the round even as the last day for submission of bids has been pushed from April 11 to April 25.
“We have revised the schedule for promotional road shows in Singapore and Australia. The road show in Singapore will now be held on March 28, and the one in Perth on March 31.
This leaves very little time for companies to evaluate data and take a bid so the bid closing date has been postponed,” said Anil Jain, joint secretary (exploration), ministry of petroleum and natural gas at the session.
The government has offered 57 oil and gas blocks, including 19 in deep sea, 29 on land and nine in shallow water areas in the seventh round. It will complete the bid evaluation, award and signing of production sharing contract by July-August.
Finance minister P Chidambaram, through the Finance Bill and an accompanying memorandum tabled in the Lok Sabha, has proposed a new clause in sub-section 80-IB(9) that takes away “petroleum and natural gas” from the definition of “mineral oil”.
Incidentally, such a move would leave nothing in the category of mineral oil since there is no other oil that is commercially produced from minerals, except crude oil that has been referred to as petroleum.
“We (the government) stand committed to the tax holiday…There is confusion. (We) expect resolution of the issue before the bid closing date,” said another senior ministry official while replying to queries from the prospective bidders.
Another interpretation of the change that is doing the rounds is that the lifting of tax holiday benefit would be applicable to only those companies that produce crude oil as well as have refineries since there is a latent benefit for these companies, said an official.
However, this version can be questioned since the production sharing contract (PSC), signed at the time of assignment of contract, spells out explicitly that the first right of purchase rests with the government or its nominee.
Sources had earlier told DNA Money that the ministry of finance, in fact, wanted to remove natural gas from the mineral oil definition that would not only adversely impact Reliance Industries Ltd and Oil and Natural Gas Corporation but all the companies that have discovered natural gas or have pledged investment under NELP regime.
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