FICCI calls for 10-yr tax holiday on oil and gas pipelines
New Delhi, May 17 (UNI) The Federation of Indian Chambers of Commerce and Industry (FICCI) today urged the government to give a 10-year tax holiday to the transport and storage facilities of gas and oil pipelines, under Section 801A of the Income Tax Act.
The Chamber has asked for a 10-year tax holiday on the laying of pipelines, storage terminals and other related facilities for transportation and storage of petroleum products, besides granting of infrastructure status to pipelines.
In a memorandum submitted to the Finance Ministry and the Ministry of Petroleum and Natural Gas, the Chamber pointed out that the creation of domestic production and refining capacity in the petroleum sector would be of use if other related infrastructure was also created in order to ensure speedy and timely distribution of products in various parts of the country.
The incentive would help in resolving problems of unemployment, particularly of unskilled workers, the Chamber felt and stated that the country needs at least 22,000 kms of additional gas pipeline network (besides the planned network by PSUs of 17,000 kms, an additional 5,000 kms would at least be required).
Employment estimates for 1,000 kms of pipeline constructed is on an average 26,000 man-years over with a construction time of around 10 years.
FICCI suggested that since laying of pipelines is in the larger interest of the people, such infrastructure should be declared ''public goods''.
India Inc is also of the view that existing availability of a tax holiday to undertakings engaged in exploration, extraction, production or refining of mineral oil, instead of being restricted to the first seven years, should be allowed to be claimed at any time during the first 10 years after the commencement of commercial production.
Also there is need to allow 150 per cent weighted deduction under section 42 of the Income Tax Act to incentivise corporates to adopt a more aggressive approach and to provide service tax exemption to services provided by consultants in the oil and gas exploration and production sector.
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