After exempting foreign companies, the Budget has exempted the income of Indian Strategic Petroleum Reserves Ltd (ISPRL) from taxes on transaction of crude oil stored in the underground caverns it built as country’s strategic stockpile.
In 2017, the government had exempted foreign companies from paying income tax on the sale of oil they store in India’s strategic oil reserves.
According to a budget document, the income of ISPRL will be exempt from taxes on the transaction of crude oil stored in its strategic caverns, provided the company replenishes the removed fuel within three years.
Tax changes on ISPRL will be effective April 1. The then Finance Minister Arun Jaitley had in Budget 2017-18 exempted income of a foreign company, which books capacity in the strategic storages, from the sale of leftover stock. Prior to that, exemption from payment of income tax was available only during the duration of the contract a company entered into for hiring the storage caverns.
The Budget also abolished import tax on very low sulphur fuel oil (VLSFO) used by ships to reduce costs for local shipping companies. This relief is in line with exemptions offered to other bunker fuels.
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Also, the import tax on calcined petroleum coke, used by aluminium makers to make anodes, will be reduced to 7.5 per cent from 10 per cent earlier. These tax changes took effect from Sunday.