Small oil and gas field operators have urged the central authorities to withdraw the windfall tax on crude produced in FY23 as it might be the primary yr of manufacturing for virtually all of them, reported Livemint on Tuesday.
The Association for Discovered Small Field Operators (ADSFO), in a letter to the oil ministry, stated they need to be exempt from petroleum cess (levied by the use of particular extra excise obligation or SAED), or the windfall tax on their total manufacturing for FY23, the report said.
The central authorities from July 1, 2022, levied a tax on crude and petroleum merchandise to seize supernormal earnings of power corporations amid a pointy rise in world oil costs. However, the cess is just not relevant to crude oil produced from found small fields (DSF).
The Centre had notified in subsequent notifications that the windfall tax wouldn’t be levied on companies whose oil manufacturing was lower than 2 million barrels in FY22 and that the cess was not relevant on incremental manufacturing over the manufacturing reported within the final monetary yr.
While the intention is to not overtax small and marginal field operators, the affiliation stated, it added that circumstances in notifications make it troublesome or DSF operators to get an exemption.
As a lot of the DSF operators are but to supply oil and gas from their fields and the primary manufacturing might begin in FY23, the affiliation stated that the finance ministry ought to challenge a clarification that every one manufacturing ought to be exempt from cess this yr, the affiliation stated, reported Livemint.
The ADSFO within the letter stated that there isn’t any approach that DSF operators might declare exemption from tax on incremental manufacturing in the course of the earlier yr as there was no manufacturing throughout that interval. The affiliation additional urged that every one manufacturing in FY23 ought to be taken as incremental as this granted full exemption from windfall tax, Livemint reported.