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Web Excl: Restoration of tax breaks on natural gas output
Section 80-IB (9) of the Income Tax Act, 1961 (‘Act’) provides for a tax holiday to an undertaking engaged in commercial production of mineral oil or refining of mineral oil. Tax holiday is available for a period of 7 consecutive tax years, starting from the year in which the undertaking begins commercial production or refining of mineral oil. The interpretation of the term ‘mineral oil’ has always been a contentious issue with the Revenue Authorities. Prior to Finance Bill, 2009, position on tax holiday for natural gas was not clearly articulated in the law nor was any clarification issued by the Revenue Authorities. The Revenue Authorities has always argued and considered that the expression ‘mineral oil’ as mentioned in section 80-IB (9) of the Act does not include natural gas. The Finance Minister should have taken this opportunity to clarify the law before the introduction of new Direct Tax Codes rather than leaving it for courts to interpret and decide which would take considerable time. Aseem Chawla is partner and Amit Nayyar is consultant at Tax Practice Group, Amarchand & Mangaldas & Suresh A Shroff & Co - Road repair gets service tax waiver - FBT is off, it"s back to perquisites tax - LLP"s brought at par with general partnerships for tax purposes - Web Excl - Dividend distribution tax: An anomaly unresolved - Web Excl: Analysis of Report Card on implementation of Kelkar Committee - Eco survey suggests Income Tax Code to replace archaic law Sensex pares gains; Hindalco up 4% Rahul and Udhav spar on Mumbai migrant issue NTPC fixes FPO base price at Rs 201 a share Navy to formally induct MiG-29K naval fighter jets Markets remain listless MorePay Day Loans commented:
Though the Cabinet had guaranteed exemption from payment of income-tax on oil and gas production from areas awarded under the New Exploration Licensing Policy, the finance ministry last year said the fiscal incentive are only meant for oil.
22.09.2011
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