New Delhi, Jun 30 (UNI) The Central Board of Direct Taxes (CBDT) today clarified that Finance Ministry has not gone back on its commitment to provide tax holiday in respect of profits derived from the commercial production of both oil and natural gas.
The clarification was issued after recent newspaper reports suggesting that the Finance Ministry has gone back for the same.
Section 80-IA(4E), the predecessor section to section 80-IB(9), was introduced in the financial year 1997-98. Section 80-IB(9) replaced section 80-IA(4E) with effect from the financial year 1999-2000.
However, there is no material difference in the content or substance of the old provision and the new provision.
Subsequent to its introduction, bidding has taken place under NELP I to NELP VI and no request for amendment of the section was received from any quarter, an official statement said.
Meanwhile, whether natural gas is included in the expression ''mineral oil'' was raised by certain contracting parties before different authorities, including tribunals and courts.
The issue is, therefore, sub-judice and it will only be appropriate to allow the Courts to resolve this issue.
This has been abundantly clarified by the Finance Minister in his reply to the debate on the Finance Bill, 2008 in the Lok Sabha.
Furthermore, as oil exploration companies are aware, under Production Sharing Contracts with the Central Government, the exploration company is entitled to recover the full costs (as cost petroleum) before profits are shared with the Government or subject to any tax, the statement added.
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