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Oil & gas industry left unhappy by the Budget: Key demands remain unfulfilled
Feb 07:   Now that the budget is over, what the key budgetary demands set by the oil the gas industry which remained unfulfilled?
Among the key demands overlooked by the budget are:
8Extension of exemption under section 10(48A) to Indian companies who have been engaged in the business of storage of crude oil / natural gas in India
8Ceiling of 20 per cent on Profits for Site Restoration Fund (SRF) Contribution under section 33ABA of the Act should either be removed or increased to at least 50 per cent
8Losses from the specified business under Section 35AD of the Act to be made eligible for set-off  against profits from other businesses of the taxpayer, and not restricted to be set-off against only the  specified businesses. Accordingly, section 73A of the Act be deleted
8Extension of benefits under section 42 of the Income Tax Act, 1961 to (i) Pre-NELP contracts, which have the President’s assent; and (ii) for expenses incurred in connection with oil and gas blocks  located outside India
8Remove the prerequisite to surrender the area for claiming infructuous or abortive expenditure under Section 42. Such expenditure may be allowed as deduction in the year in which the area is abandoned  as abortive
8Clarification on applicability of Section 44BB in case of income by way of Fees for technical services (‘FTS’)
8Clarification on non-inclusion of reimbursement of service tax in the gross receipts under section 44BB
8Exemption from book profit tax under section 115JB of the Income Tax Act, 1961 to oil and gas companies availing specific incentives or covered under specific tax regimes (section 42 or section  44BB, etc.)
8Liquefied Natural Gas (LNG) storage facility at port location to be included in the definition of ‘Industrial infrastructure’ in section 80-IA to promote import of LNG
8Clarification on definition of ‘mineral oil’ under section 80-IB(9) of the Income Tax Act, 1961 and to include natural gas and Coal Bed Methane under the definition retrospectively irrespective of NELP  rounds
8Clarification on retrospective amendment regarding definition of ‘undertaking’ under section 80-IB(9)
8Tax holiday period for Exploration and Production (E&P) undertaking should be increased from seven years to 10 years out of 15 years
8Extend the period of Incentive (sunset clause) under Section 80-IB(9) to acquisition of new blocks in India
8Allotment of Infrastructure status to the Exploration and Production (E&P) facilities to enable access to funds and availability of other benefits which have been granted to infrastructure projects, such as tax  holiday, weighted deduction, etc.
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