Get Free Financial Suggestion Here
Moily urges FM to rework provisions of DTC bill Courtesy : The Indian Express

Petroleum minister M Veerappa Moily has urged finance minister P Chidambaram to rework the provisions of the Direct Taxes Code Bill, 2013, so that investors in oil and gas exploration continue to enjoy tax holidays.

Moily has said that exploration and production of oil and gas is a high-risk enterprise and the lack of adequate capital has restricted exploration to just 22 per cent of the country’s total land mass. He has urged the finance minister to ensure that tax benefits continue for all utilities involved in exploration activities even to projects which have not begun commercial production.

“It appears that as per the provisions of draft DTC bill, tax holidays would be restricted to blocks which have commenced commercial production on or before March 31, 2015. Tax benefits should be extended under Section 801B(9) of the Income Tax Act even for all blocks awarded under NELPs or coal bed methane where commercial production has not commenced,” Moily wrote in a letter to the finance minister.

Under the I-T Act, crude oil producers get seven-year tax-free profits only if they start production from any block licensed before April 1, 2011. Only refiners who have begun operations before March 31, 2012 are eligible for the same tax break. The apprehension is that once DTC is operational, tax benefits might not be extended to any other sector except infrastructure.

The expenditure incurred by the exploration industry on capital assets in course of development and production operations are eligible for depreciation under Section 32 of the DTC bill, but the legislation does not contain any transition provision to provide for deduction for un-depreciated value of capital asset, the oil minister reasoned.

The minister said the provision regarding setting off losses of business of oil or natural gas from the profit of other business of the assessee should continue as per the current provisions of the I-T Act. He suggested that relevant provisions of DTC should be amended so that losses on sale of assets are allowed to be set off against regular income.

Moily also said that there should be an mechanism to appeal against the decision of the Authority of Advance Ruling and Dispute Resolution as the DTC bill says any order passed by the authority would be final and binding for the contesting parties

© 2012 Centre for Tax Awareness and Research Design and Developed by

During my 37-year-old career with Income Tax department, I moved from place to place, post to post. For me, every posting was a challenge, and at the same time an opportunity to deliver.

After my retirement as Chairman of Central Board of Direct Taxes, I was invited by various institutions and NGOs to deliver talks on tax matters. While advising taxpayers across sectors, I noticed, our vast salaried class including armed and paramilitary forces, pensioners or senior citizens, NRIs, professionals and small business establishments need the right guidance. Most taxpayers do comply with their tax obligations fully. Yet, they are not somehow relaxed and are burdened with anxieties. A large number of taxpayers are not even aware that getting tax refund on time is a basic right.

In one such meeting, a middle-aged man quizzed me why could not I give tax advice 24X7. For a moment, I had no answer. He then added that I should give tax solutions online so that he does not need to come from a remote place to attend my lecture. I thanked him for his suggestion.

For a while I was restless. Already I had got myself enrolled as a Member of the Bar Council of Delhi and as an Advocate of Delhi High Court Bar Association, thanks to my law degree from the University of Allahabad. Yet, I was not sure how I could help the vast majority of taxpayers who somehow maintain a safe distance from the taxmen. I then tossed the idea of creating a tax think-tank with some of my former colleagues and highly spirited individuals. All of us immediately agreed on one count: millions of Indian taxpayers expect to access tailor-made tax research materials and seek guidance from those who have been parts of the tax machinery for decades.

That is how CTAR was born. So, be a part of our passionate journey to explain tax laws and rules in simpler words. Just drop us a few lines on any query related to direct and indirect tax or FEMA. We are at your assistance. We also look forward to hearing your experiences while dealing with the system.