Income tax holiday only for commercial production of crude oil

With the submission date for bids under the latest oil and gas exploration licensing round closing on June 30, the Petroleum Ministry on Friday clarified that as advised by the Ministry of Finance, the Income Tax holiday will ‘as of now’ be available for commercial production of crude oil only and not for natural gas. The bid submission date of the seventh round of New Exploration Licensing Policy (NELP-VII) had to be extended thrice earlier before the final date of June 30, due to uncertainty arising over the taxation issues. The uncertainty had led to both domestic and international players adopting a more cautious approach before working out their bidding strategies. According to sources, this uncertainty has led to many international players deciding against participating in the bidding round.While inviting prospective bidders to participate in the licensing round, the Petroleum Minister, Mr Murli Deora, said, “Interested bidders are requested to bear the above clarification in mind and bid whole-heartedly.”The Government had launched NELP-VII bidding round on December 13 last year and had invited offers for exploration of oil and natural gas from exploration and production companies. Mr Deora called upon the hydrocarbon exploration and production industry to participate in NELP-VII bidding offer so that they became part of the ever growing exploration and production success story of India. – www.thehindubusinessline.com