Cess on domestic crude oil may be halved to give a boost under ‘Make in India’
Bengaluru: With a view to giving more impetus to ‘Make in India’ push to oil and gas explorers, the Indian government may halve cess on domestic crude oil to encourage exploration activity and allow Covid-hit oil producers to protect their margins, reported by Swarajya.
Quoting sources, it said the proposal by the Union Oil Ministry is to reduce it to 10 per cent, against the existing 20%. If this is accepted by the Finance Ministry, the changes may be announced as part of Budget 2021-22 proposals, it added said.
But it is to be noted that the reduction in cess might cost the exchequer hugely. It is to be noted again that the ONGC alone pays cess in excess of Rs 10,000 crore annually.
“Cess is levied only on crude oil produced domestically. Thus, it places domestic crude oil production vis-a-vis imported crude oil at a significant disadvantage as imported crude does not attract such duty. This levy is against the spirit of ‘Make in India’,” industry chamber FICCI had said in a memorandum given to the Finance Ministry earlier.
“Abolition of the OID (Oil Industry Development) cess for pre-NELP and nomination blocks, reduction in rates of royalty and greater marketing freedom are some measures that will help revive investments and fast-track growth in the sector. Greater support to exploration in the form of faster approvals and self-certification will boost investor sentiment and send a strong message to international investors on the ease of doing business in India and attract further capital,” the website quoted Sunil Duggal, Group CEO & Chief Safety Officer, Vedanta Ltd, as saying.
Narendra Modi’s Atmanirbhar Bharat envisages an India that is self-reliant and at the same time, become a manufacturing hub for the entire country.
He also stressed on the need to give more importance to locally produced goods under the label going ‘vocal for local’.
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Last Updated Jan 26, 2021, 4:50 PM IST