‘Courts will decide whether natural gas comes under mineral oil’

The Central Board of Direct Taxes (CBDT) on Monday reiterated the Government’s existing stance that it was for the courts to resolve the issue of whether ‘natural gas’ should be included in the expression ‘mineral oil’ for getting the benefits of the seven-year tax holiday in respect of profits derived from commercial production of natural gas. This has also been “abundantly clarified” by the Finance Minister in his reply to the debate on the Finance Bill, 2008, in the Lok Sabha. “Whether natural gas is included in the expression ‘mineral oil’ was raised by certain contracting parties before different authorities, including tribunals and courts. This issue is, therefore, sub-judice and it would only be appropriate to allow the courts to resolve this issue,” an official release issued by CBDT said.The CBDT added that reports in the recent past in a section of media that the Finance Ministry had gone back on its commitment to provide tax holiday in respect of profits derived from the commercial production of both oil and natural gas was “not correct”. 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, the release added. – www.thehindubusinessline.com