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Implications on Oil & Gas Industry

India Union Budget 2006

Petroleum Federation of India

organised by

Senior Management Meet on

‘2006 Union Budget Analysis for Oil & Gas Industry’

“India Union Budget 2006 – Implications on Oil & Gas Industry” has been prepared by Oil & Gas Tax Group of PricewaterhouseCoopers Pvt. Ltd., a specialty practice established to serve the unique tax requireme nts of the oil & gas industry. This publication provides broad view of implications of India Union Budget 2006 on the stakeholders of oil & gas industry.

The information in this publication is for guidance only and should not be considered as a substitute for appropriate professional advice. We would strongly recommend readers to seek professional advice before making any decisions.

For further information, please contact the PricewaterhouseCoopers office in India.

© PricewaterhouseCoopers 2006

Contents

Section 1 3India Union Budget 2006 -Perspectives

Section 2 4Economic Survey 2005-06 -Comments on Oil &Gas Sector

Section 3 10Analysis of Union Budget 2006Implications on Oil &Gas Sector

Section 4 16Pre-Budget Expectations byOil & Gas Industry

Section 5 21Recent Significant PolicyChanges and Initiatives inOil & Gas Sector

Section 6 26Commodity Balance ofPetroleum and PetroleumProducts

Abbreviations 28

PricewaterhouseCoopers 2


Section 1

India Union Budget 2006 -Perspectives

The Union Budget for 2006-07 makeseffective use of the macro-economic scenarioto find a reasonable balance betweenenhanced resource commitments toinfrastructure and social sector programmes,indirect tax reforms and fiscal consolidation.There is nothing in the budget that will hinderor disturb the current high growth - lowinflation configuration and many things thatwill contribute to sustaining it.

The finance minister has used the healthymicro-economic environment that providesfor ambitious revenue targets. Tax reformshave been made and excise duty has beenreasonably brought down. Budget has beencommitted to social sector programmes, andit has been now intended to be morecentralised and coordinated. On this aspect,Budget has moved from a project approachto a mission approach.

A couple of factors, though, do reflectnegatively on an otherwise very goodbudget. One, the opportunity to rationalisethe duty structure on petroleum products and,in the process, reduce some of the currentburden on petroleum companies was notfully exploited. This, of course, could be said

about subsidies in general, but that is alarger issue. Second, while the macro-economic assumptions underlying thebudget look quite realistic, there appear to besome imbalances in the revenue targets setfor next year.

It has been suggested in certain quarters thatdrafting up Budget wish-lists is a futileexercise, although one that causes onlyslight inconvenience, involving, as it does,little more than dusting down last year’s andchanging the date. Significant measureswere expected from this year’s budget to helppetroleum industry to and on reflection noneof them have been met. True to form, therewere no surprises, with a continuingemphasis on fiscal and budgetary disciplineeven though the Budget was made against abackdrop of unprecedented macroeconomichealth and stability.

In the past, we have compared FinanceMinister to being at a crossroads, needing tochoose between a path of traditional relianceon tax revenues and economic growth, andmore radical measures. Finance Minister stilltarries at the crossroads.


Section 2

Economic Survey 2005-2006 -Comments on Oil & Gas IndustryThe Government of India released EconomicSurvey 2005-06 on the February 27, 2006.The following paragraphs analyse and put inperspective the oil & gas sector relatedcomments in the Survey.

Overview of Growth

Economic Survey 2005-06 considers thecurrent growth of Indian economy as ademonstration of nascent strengths aftergrowing at 8.5 per cent and 7.5 per cent in

the two previous years and places theoutlook of the Government of GDP growth inthe year 2005-06 at 8.1 per cent at constantprices.

On a positive note, the Survey observes thatGDP at constant prices in excess of 8.0 percent has been achieved by the economy inonly five years of recorded history, and twoout of these five are in the last three years.The robust growth in the GDP of the countryhas been achieved as a result of industrialgrowth, modest inflation despite spiralling

Note : Figures represent percentage change over previous year.Source: Economic Survey 2005-06

Sectoral Real Growth Rates in GDP (at factor cost)


crude oil prices. Increase in investments,growth in exports and imports, developmentof infrastructure and fiscal consolidation.

According to the national income datareleased by the Central StatisticalOrganisation (CSO) on February 7, 2006, theadvance estimate (AE) for growth of GDP atfactor cost at constant (1999-2000) prices in2005-06 at 8.1 per cent was up 0.6 percent-age points over the 7.5 per cent growthrecorded in 2004-05. The CSO has changedthe base year for calculation of nationalincome aggregates at constant prices from1993-94 to 1999-2000. The revised growthrate with base 1999-2000 is the same as orless than the rate with base 1993-94 for eachof the four earlier years ending in 2003-04.

In contrast to the sharp fluctuations inagriculture, industry and services havecontinued to expand steadily. The Surveynotes that since the beginning of the TenthPlan in 2002-03, with annual growth of 7.0per cent or more, industry and services haveacted as the twin engines propelling overallgrowth of the economy. Over a somewhatlonger horizon, in the six years between2000-01 and 2005-06 (AE), on average,services with a share of 52.0 per cent of GDP,contributed 65.0 per cent of GDP growth, andincreased its share in GDP from 49.8 percent to 54.1 per cent.

The survey acknowledges that speedyprovision of quality infrastructure throughappropriate policy stimulus constitutes thefirst and foremost component of the chal-lenge of positioning the economy on asustained high-growth trajectory. India’sgrowth prospects are intricately intertwinedwith the rapid development of physicalinfrastructure such as power, roads, ports,and airports, and efficient delivery of suchservices.

Highlights of Oil & Gas Industry

The survey recollects that, with the declaredintention of moving towards market-deter-mined pricing for petroleum products, theGovernment announced the dismantling ofthe APM with effect from April 1, 2002. Forkerosene and LPG, being items of massconsumption, it was decided that subsidieson these will continue on specified flat ratebasis. Accordingly, as per the “PDS Kero-sene and Domestic LPG Subsidy Scheme,2002”, a flat rate of subsidy per selling unitwas approved to be given to public sector OilMarketing Companies (OMCs). The subsidywas equal to the difference between the costprice and the issue price per selling unit ason March 31, 2002, and was to be phasedout in three to five years. The OMCs were toadjust the retail selling prices (RSP) of theseproducts in line with international pricesduring this period.

There was sharp increase in international oilprices from late 2003, combined withconsiderable week-to-week and even day-to-day volatility. Notwithstanding the conse-quent steep rise in international prices ofsensitive petroleum products, oil marketingcompanies moderated the price increase inpetrol and diesel besides maintaining theprices of already subsidized products likedomestic LPG and PDS kerosene. Conse-quently, the OMCs suffered underrecoverieson sale of petrol and diesel. However, as theunder recoveries of the OMCs were reachinguntenable proportions, in October 2003,Government decided that the OMCs wouldmake up about a third of their under-recover-ies on these two products from the surplusesin petrol and diesel, and the balance wouldbe equally shared by the upstream compa-nies and the OMCs. In spite of this subsidy-sharing mechanism, and discounts given by


the refineries to OMCs, the burden of underrecoveries continues to rise steeply. Theestimated under-recoveries more thandoubled from Rs. 9,274 crore in 2003-04 toRs.20,146 crore in 2004-05, and continue torise.

The Survey states that the spiraling interna-tional petroleum prices not only create apressure on budgetary resources directlyand indirectly through losses of oil PSUs, butalso have a debilitating effect on the perfor-mance of the industrial sector as a whole.Petroleum is a universal intermediateproduct. In response to the rising interna-tional prices of petroleum products, Govern-ment raised the prices of petrol and dieselper litre by a moderate Rs. 2.50 and Rs. 2.00,respectively, with effect from June 21, 2005.As the increase continued to persist, Govern-ment was forced to increase the prices ofpetrol and diesel further by Rs. 3 and Rs. 2per litre, respectively, with effect fromSeptember 7, 2005. The prices of domesticLPG and PDS kerosene were, however, leftunchanged. The total subsidy as on Jan.,2006 calculated at international prices for2005-06 per cylinder of domestic LPG of 14.2kg and per litre of PDS Kerosene, wasestimated at Rs. 170.32 and Rs. 12.96respectively. In order to compensate thepublic sector OMCs on account of theirmounting under-recoveries, over and abovethe amount allowed as direct subsidy, budgetfor 2005-06 provides an additional Rs. 5,750crore for ‘oil bonds’.

The Survey in brief explains the progressmade in India on the LNG front and con-cludes the brief stating that, in June 2005,Sale Purchase Agreement (SPA) for import of5 MMTPA of LNG from Iran was signedbetween GAIL/IOC/BPCL and NationalIranian Gas Export Co. Ltd. (NIGEC) and

Oil price and global economicprospects

Crude oil prices remain a key input indetermination of global economic pros-pects. A rise in crude oil prices affects theglobal economy through a variety ofchannels.

l An initial fall in aggregate demandowing to a transfer of income from oilconsumers to oil producers, who tend tohave a lower propensity to consumethan the former.

l A supply-side effect reflecting higherproduction costs and lower profitmargins.

However, with falling oil intensity overthe past three decades, especially inindustrial countries, this effect has beenweaker.

l A rise in inflation resulting from higherproduction costs, depending on theresponse of monetary policy and theextent to which consumers and produc-ers can offset the declines in incomesand profits, respectively.

l A potential impact on activity throughlower consumer and investor confi-dence and reduced willingness tocommit to longer-term capital projects.

l A lasting impact on energy demand andsupply over time, depending on theduration and extent of price increases.

Source: Economic Survey 2005-06


imports are likely to start by the end of 2009.

With the expected increase in gas availabilityfrom various domestic sources and importedLNG, the Survey highlights need for com-mensurate increase in gas pipeline infra-structure. It states that a gas pipeline policy,envisaging authorization from Government/regulator for all gas transmission pipelines isbeing worked out and that the Government isin the process of setting up the Petroleumand Natural Gas Regulatory Board which,among other things, will formulate andregulate the pricing mechanism and ensurecompetitive structure of this sector.

Inflation and Effect of Oil Prices

Inflation, in most parts of the world, showed arising tendency on account of rising globalcrude oil prices. The sharp and spiralingincrease in international oil prices from late2003, combined with considerable week-to-week and even day-to-day volatility, posedconsiderable challenge in the maintenanceof macroeconomic stability. Average headlineworld price of Indian basket of crude petro-leum increased by 44.5 per cent, from $US37.3 per barrel in April-November 2004 toUS$ 53.9 per barrel in April-November 2005,and was US$ 58.10 per barrel on February13, 2005. Nevertheless, the virtuous expan-sion in the current phase of economic upturnhas been maintained without an undueescalation of domestic prices. In India,inflation, measured by a point-to-pointincrease in the Wholesale Price Index (WPI)declined from 5.7 per cent on April 2, 2005,to a low of 3.3 per cent on August 27, 2005.Despite increasing thereafter, prices haveremained at comfortable levels with the WPIinflation at 4.1 per cent on February 4, 2006vis-à-vis 5.0 per cent on February 5, 2005.

As on February 4, 2006, the fuel group, withan inflation rate of 7.6 per cent, contributed40.5 per cent to the overall inflation, whichwas marginally lower than 42.8 per cent ayear ago. Much of the inflation in the fuelgroup is attributable to the ‘pass through’effected in June and September 2005, in theform of enhanced retail prices of petrol anddiesel, precipitated by the flare-up in globaloil prices. While retail prices of kerosenecanalised through the public distributionsystem (PDS), and domestic LPG were keptunchanged for softening the burden onconsumers, the incomplete pass through,however, entailed adverse implications bothfor the finances of domestic oil marketingcompanies and for the exchequer because ofthe issue of ‘oil bonds’ to such companies.

Petroleum Trade

Growth in India’s merchandise imports in2004-05 at 40 per cent in dollar terms wasthe highest since 1980-81. This surge ingrowth in 2004-05 was mainly due to thesteep rise in price of crude petroleum andother commodities with value of POL importsincreasing by 45.1 per cent. While volumegrowth in import of POL was subdued at 6.4per cent, largely in response to the priceincrease, larger imports filled the gapbetween growing demand and stagnantdomestic crude oil production.

Unlike in 2003-04, the surge in POL importsin 2004-05 and 2005-06 (April- November)was dominated by the price impact. Thestiffening of global crude oil prices wascontributed by a combination of heighteneddemand, limited spare capacity and geopo-litical threats to the existing capacity. Crudeoil prices have since moderated and wasruling at US$ 60.76 per barrel as on Febru-ary 9, 2006. The surge in crude oil prices has


sharpened the focus on the adverse impactof such volatility on domestic prices and theneed to minimize such impact. Given India’srelatively high oil intensity and increasingdependence on imported crude oil, effortsare being made to diversify sourcing of suchimports away from the geopolitically sensitiveregions. Another development has been thedecision to build up strategic oil reserves,equivalent of about 15 days requirement, tominimize the impact of crude price volatility inthe short term. In a related initiative, India iscoordinating with large oil importing coun-tries in Asia, in exploring possibilities forevolving an Asian products marker, in placeof an Asian premium, which would reducethe premium paid by Asian countries andthus, to some extent help in controlling thecountry’s oil import bill.

The most notable feature was the 91 per centgrowth in exports of petroleum products, witha perceptible increase in its share in totalexports. It reflected not only the rise in POLprices, but also India’s enhanced refiningcapacity developed with a supportive tariffstructure

Petroleum Products’ Pricing

In the context of public finance, appropriatepricing of petroleum products assumessignificance, particularly with the petroleummarketing sector dominated by public sectoroil companies. The movement towardsmarket-determined pricing in hydrocarbonsector has floundered pending the resolutionof the issue of subsidy in domestic LPG andPDS kerosene. Kerosene prices have

remained unchanged since April 1, 2002despite the unprecedented increase inacquisition cost of crude and costs ofrefining.

Customs and excise on petroleum productsconstitute about 40 per cent of the totalcustoms/excise collections of the Govern-ment. With an equally high sales tax, rangingfrom 12 per cent to 38 per cent, the taxcomponent of the retail price of petrol andhigh speed diesel remains high. This hasbeen further compounded by the dutydifferential across products, including on thebasis of end-use, leading to problems of fuelswitching and other malpractices. The issueof harmonising state levies on petroleumproducts is being deliberated by the Empow-ered Committee of State Finance Ministerson VAT. A Committee on pricing and taxationof petroleum products headed by Dr. C.Rangarajan has recently submitted itsrecommendations for a new mechanism ofpricing that promotes efficiency of thehydrocarbon sector on the one hand, and theconcerns of maintaining affordability in pricesof cooking fuel for the consumers on theother.

With medium-term prospects of crude pricesremaining high, the continuance of incom-plete pass-through is not sustainable withoutserious consequences to the financial healthof oil companies and the exchequer. Besides,the perverse incentives for fuel switching anddistortions arising from differential tax ratesneed to be addressed. The management ofthe lingering oil crisis requires rapid and boldpolicy responses with a firm resolve.


High and volatile international petroleumprices impart an element of uncertainty in theinflation outlook not only for India but also theworld economy. With increasing dependenceon imported crude and growing openness,India is no longer insulated from the rest ofthe world in price developments. Thisinflation uncertainty, together with theunresolved global macroeconomic imbal-ances, casts its shadow on the interest ratescenario.

Energy Regulator

Policies and institutions need to be gearedup to meet the specific requirements of theinfrastructure sectors in India. A well-definedregulatory architecture has to be in place, toincrease the comfort level of the differentplayers in the market. Issues of span ofcontrol and conflicting domains need to bedelineated and fleshed out. For example, anenergy regulator, cutting across line minis-tries, needs to be in harness to tap thesynergy of the different sectors.


Section 3

Analysis of Union Budget 2006 -Implications on Oil & Gas Sector

Direct Tax Implications

Corporate tax

l Corporate tax rate for domestic andforeign companies has been left un-changed at 33.66 per cent and 41.82 percent respectively.

l Minimum alternate tax is proposed to beraised from 8.42 per cent to 11.22 percent in case of domestic company and7.85 per cent to 10.46 per cent in case offoreign company. Now MAT applicable, iftax payable is less than 10 per cent ofbook profits as against 7.5 per centearlier.

l Tax paid under MAT regime is nowallowed to be carried forward for sevenyears as against 5 years earlier.

l MAT is now payable on long term capitalgain earned on sale of listed shares andunits of Mutual Fund.

l For determining MAT, depreciation onrevalued portion of asset would not bedeductible.

l There has been an increase in SecurityTransaction Taxes by 25 per cent.

l Time limit for setting up a power genera-tion and/or distribution undertaking, in

order to claim tax holiday, has beenextended from March 31, 2006 to March 31,2010. This extension is beneficial to oil andGas company, which are planning to set upindependent captive power generationunits.

l Time limit for setting up an industrial park inorder to claim tax holiday has beenextended from March 31, 2006 to March 31,2009.

l Exemption for aircraft lease rentals undersection 10(15A) extended for agreementssigned up to March 31, 2007. This wouldbenefit companies providing services ofhelicopters/ aircraft to the E&P sector.

l Now oil and gas companies need to filereturn by October 31 in order to be eligibleto claim tax holiday under section 10B forexport, 80-IA for generation of power, 80-IAB for SEZ, 80-IB for E&P and refiningactivities and 80-IC for oil companiesbased in Northeast region.

l If taxes paid in foreign country are eligiblefor credit in India, then it would not be taxdeductible in determining the taxableincome.

l Conversion of interest payable into loanwill not be treated as actual payment ofinterest and thus not eligible for deduction.


l Disallowance for expense incurred toearn income exempt from tax, will now bedetermined as per the prescribed method.

l Contribution by employer to a superan-nuation fund up to INR 1,00,000 peremployee will not be subject to FBT.

l Any expense by way of payment to aperson of repute for promoting sale ofgoods/services shall not be chargeable toFBT.

l Pick up and drop facility provided to theemployees shall not be subject to FBT.

l 5 per cent of expenses on tour and travel(including foreign travel) will now beconsidered as Fringe Benefit as against20 per cent earlier.

l Tax paid in foreign country and MATcredit will now go to reduce tax liability fordetermining interest for delay in filing oftax return and default in payment ofadvance tax.

l Interest for not deducting tax or for delayin deposit thereof to be paid beforefurnishing of the quarterly withholding taxreturn.

l Penalty for default in collecting Tax - up toamount failed to be collected

l Penalty for false quoting of TAN to beRs.10,000.

l The time limit for completing assessmenthas been reduced from 24 months to 21months from the end of the relevantassessment year. Thus assessmentwould need to be made by 31st Decem-ber instead of 31st March.

l Annual filing of TDS and TCS returnshave been done away with.

l Present TDS regime of issuance ofwithholding tax certificate i.e. Form 16and Form 16A to continue till financialyear 2007-08.

l Tax officer may, having regard to thenature of the transactions, suo moto allota permanent account number to anyperson, irrespective of whether or not theperson is liable to pay income tax.

Personal Income tax

l Tax rates remain unchanged

l Investment for 5 year or more in FDRswith scheduled banks eligible for Sec80C deduction

l Cap on pension funds premium fordeduction u/s 80CCC increased from Rs.10,000 to Rs. 100,000. Aggregate cap on80C and 80CC continue at Rs. 100,000.

l 1/6 scheme of filing the tax returnsabolished


Indirect tax implications

General

l Proposal to introduce GST w.e.f. April 1, 2010.

l CENVAT and Service Tax to converge at 16 per cent.

l End use exemptions to be removed in due course. Notifications to be made available forpublic debate on the Ministry website shortly.

l E-payments of Excise and Customs Duty to be introduced.

l Departments of Customs and Central Excise to undergo Business Process Re-engineering.

l Introduction of risk management system and electronic data interchange in the CustomsDepartment.

l Advance Rulings extended to determination of taxability under excise/ service tax laws.

Customs Duty

l Median rate of basic customs duty reduced from 15 per cent to 12.5 per cent

l Basic customs duty rates of petroleum products have been reduced. The revised duty ratesare as under:

Product Pre-Budget Post-Budget

Naphtha 10% 5%

Petroleum coke 10% 5%

Goods falling underHeading 27.10, 2712, 27.13 and 27.15 15% 10%

Catalysts 10% 7.5%

l ACD of 4% introduced across the board on most imports. However, petroleum crude, kero-sene for PDS, LPG for domestic household consumers, petrol, diesel, coal, coke and petro-leum gases and fuels falling under Chapter 27 of the CTA have all been exempted from theACD of 4%.

l Pipeline projects for transportation of crude oil, petroleum products and natural gas havebeen notified as Project Imports under Heading 98.01 of the CTA.


Status on petroleum products :

CENVAT


Crude Oil Cess at the rate of Rs 1800 per tonne Cess at the rate of Rs 2500 perunder the OIDA tonne under the OIDA

NCCD at the rate of Rs 50 per tonne NCCD at the rate of Rs 50 per tonne


BED SED AED SAED

Rs./ltr Rs./ltr

Petrol 8% + Rs. 5 per Ltr NIL 2.00 6.00 No change

High Speed Diesel 8% + Rs.1.25 per ltr - 2.00 - No change

Light Diesel Oil 16% + Rs. 2.50 per ltr - - - No change

Kerosene ( PDS) NIL - - - No change

LPG ( Domestic) NIL - - - No change

Service Tax

l Service tax rate increased from 10 per cent to 12 per cent.

l Service tax inter alia extended to the following new services:

n Transport of goods in container through rail;

n Ship management services;

n Public relations services;

n Business support services;

n Sponsorship services

l Scope of the following services has been expanded:

n Management consultancy to specifically include consultancy in different areas ofmanagement;

n Erection, commissioning or installation service, to include erection, commissioning orinstallation of structures, whether or not pre-fabricated;

n Consulting engineer service, to include engineering consultancy services provided byany firm or body corporate;


l Exemption from service tax in relation to general insurance for business where premium isbooked outside India has been withdrawn.

l Exemption from service tax granted on financial leasing services, including equipment leasingand hire-purchase, on 90% of the amount representing interest i.e. the difference between theaggregate of the installments payable over the lease tenure and the principal amount.

l Exemption from service tax has been extended to all taxable services provided by ReserveBank of India.

l Section 66A to levy service tax under reverse charge method on taxable services providedfrom outside India to a recipient in India.

l New section 67 introduced to provide for determination of the value of taxable services-mechanism for determination of non monetary consideration, including book adjustments, tobe laid down.

Central Sales Tax

l Empowered Committee of State Finance Ministers and the Central Government to reach aconsensus on phase out of CST

l LPG for domestic use to be notified as declared goods and hence chargeable to Value AddedTax at a maximum of 4%.


Score Sheet -Industry expectation’s realization in Budget 2006

Direct Taxes

Concessional rates of customs duty on goods required for oil and gas projects Yes, Pipelineprojects included in

the category ofProject Imports

Declared Goods status to Natural Gas under the Central Sales Tax Act, 1956 No

Reintroduction of irrecoverable taxes compensation scheme to cover underrecoveries of CST, octroi, entry tax etc. No

Excise duty on crude oil and petroleum products to be made specific orbased on tariff values No

Withdrawal of National Calamity Contingent Duty on Crude Oil No

Withdrawal of end-used based exemptions applicable to Industrial Units No

Captive consumption benefit for LSHS/ Fuel Oil etc used as Fuel Oil No

Removal of anomaly in classification of lubricating oils No

Exemption to services provided to Oil & Gas exploration sector No

Exemption from payment of service tax on LPG (Domestic)and SKO (PDS) operations No

E&P companies to choose period of seven years of tax holiday No

Deduction for infructuous or abortive exploration expenses u/s 42 No

Introduction of specific provisions in the Income Tax Act regarding ‘Farm-in costs’ No

Allowance of deduction to E&P companies for Site Restoration Fund No

Infrastructure Status to E&P under Section 80IA No

Grant of infrastructure status to cross country pipelines for crude/ gas /

petroleum products and LNG re-gasification terminals No

Extending depreciation benefits available to pollution control equipment to

capital investments made by refineries for producing fuels with stringent

emission norms No

Depreciation on LPG Cylinders No

Recognise discounts given by PSU upstream companies to PSU

downstream refiners/marketing companies No

Indirect Taxes


Section 4

Pre-Budget Expectations byOil & Gas IndustryDirect Tax

Upstream

E&P companies to be allowed to chooseperiod of seven years of tax holiday

Tax holiday u/s 80-IB(9) is available to E&Pcompanies for seven consecutive assessmentyears starting from the year in which commer-cial production commences. During theseinitial seven years, companies have largeexpenditure to set off and hence actual benefitof tax holiday may not flow to them. It wasexpected that E&P companies would beallowed to choose a period of seven years taxholiday from initial fifteen years.

Deduction for infructuous or abortiveexploration expenses u/s 42

Under section 42 of the Income Tax Act, thededuction for infructuous or abortive explora-tion expenses is not allowed till the surrenderof the area, though the same is required to becharged off in the books of accounts as peraccounting practices. As a result, oil compa-nies are unable to avail deduction of expensesincurred on abortive exploration in the yearwhen expenditure was incurred. It wasexpected that the condition of ‘surrender’ ofarea is deleted from Section 42(1)(a).

Introduction of specific provisions in theIncome Tax Act regarding ‘Farm-in costs’

Long standing demand of the E&P sector isintroduction of specific provisions in theIncome-Tax Act regarding treatment of ‘Farm-in costs’. Tax treatment of such paymentsremain unclear and gives rise to disputebetween the industry and the tax department.It discourages acquisitions in E&P sectorsince the magnitudes of tax costs are highand can result into transactions proposalsbecoming uneconomical. ‘Farm-in’ is atransaction unique to the E&P sector andthus it was expected that specific provisionsbe introduced for ‘Farm-in’ costs.

Allowance of deduction to E&P companiesfor Site Restoration Expenses

E&P companies are allowed deduction inrespect of Site Restoration expenses undersection 33ABA, only if the amount is depos-ited in a special bank account opened for thispurpose. The same results in unnecessaryblocking up of funds, which may otherwisebe mobilized by the industry for drillingoperations in India. The companies in E&Psector as well as financial services markethave matured and present more efficientalternatives to ensure adequate provisions


and accumulation for meeting abandonmentcost without having to deposit in specifiedsinking fund. It was therefore expected thatthe requirement of deposit of funds in SiteRestoration Scheme is done away with andthe deduction allowed to E&P companies forprovision of site restoration/abandonmentexpenses made on scientific basis.

Infrastructure Status to E&P underSection 80IA

Investors in industrial undertakings in sectorslike power, telecommunication, roads, ports,etc. and other infrastructure facilities havebeen granted tax benefits under the provi-sions of Section 10(23G). These benefits aremainly in the form of exemptions fromincome-tax on investment income frominfrastructure sector. Petroleum Industry is notcovered under the definition of “InfrastructureFacility”. Grant of infrastructure status to E&Pindustry has been a long outstandingdemand, for the role it can play in attractinginvestors to this capital intensive industry.

Midstream

Grant of infrastructure status to crosscountry pipelines for crude/ gas / petro-leum products and LNG re-gasificationterminals

The need for an optimal system of petroleumproduct transportation is being felt over theyears. Therefore, creation of infrastructurelike LNG regassification terminal andnetwork of pipelines is critical to growth ofindustry as well as the country’s economicgrowth. Pipelines have several distinctadvantages over other modes of transport interms of safety, eco friendliness, transporta-tion losses etc. It was, therefore, expectedthat pipelines is also classified as ‘infrastruc-

ture facility’ and granted the benefit of taxholiday under section 80-IA and underSection 10(23G).

Downstream

Extending depreciation benefits availableto pollution control equipment to capitalinvestments made by refineries forproducing fuels with stringent emissionnorms

Refineries are making substantial capitalinvestments for producing fuels with stringentemission standards in order to reducepollution. It was expected that such capitalinvestment, being pollution control measure,be treated at par with depreciation benefitsavailable to other pollution control equip-ments.

Depreciation on LPG Cylinders

Depreciation on LPG cylinders has beenconsecutively reduced from 100% to 80% to60% in the earlier budgets. Reducingdepreciation rate only indirectly increasestheir burden, particularly when 100%deprecation has been allowed for severalyears without any restriction. It is suggestedthat 100% depreciation may be restored.

For all activities

Recognize discounts given by PSUupstream companies i.e. ONGC, OIL andGAIL to PSU downstream refiners/market-ing companies as their contribution underburden sharing mechanism instituted bythe Government, under income tax andshould be allowed as deduction.


Indirect Tax

Customs Duty

Correction of the inverted duty structuresin the petroleum industry

At present the customs duty on crude oil is 5per cent while the customs duty on petroleumproducts such as Superior Kerosene Oil(SKO), Naphtha for fertilizer use and forLiquefied Petroleum Gas (LPG) is “Nil” . Theinverted duty structure leads to a higher taxon intermediaries as compared to thefinished product and also results in anegative tariff differential. The expectationfrom the budget was, therefore, a reduction inthe customs duty leviable on crude oil from 5per cent to Nil and rationalization of theduties on the other products.

Concessional rates of customs duty ongoods required for oil and gas projectssuch as

New Refineries/Refinery Expansions andGreen Fuel Projects mandated under ‘AutoFuel Policy’ , product and gas pipelines,environmental/ pollution control projects,developing CNG/ auto LPG infrastructureand pilot projects for producing hydrogen/GTL: A reduction in the customs duty onmaterials required to build hydrocarboninfrastructure would help in improving rate ofreturns and therefore, will put the projects onfast rack. At the same time, a reduction in thecustoms duty on capital goods would reducethe project cost while increasing the overallproductivity in the sector. The budget was,therefore, expected to address the aboveissue by providing concessional rates ofcustoms duty on goods and material requiredfor oil & gas projects.

Excise Duty

Excise duty on crude oil and petroleumproducts to be made specific or based ontariff values

In order to avoid unnecessary litigation itwas, therefore, expected that the excise dutyon petroleum products be made eitherspecific or based on tariff values. This movewould serve to cushion the consumers fromany volatility in the global market and alsoprove to be a revenue neutral measure as faras the exchequer is concerned.

Withdrawal of National CalamityContingent Duty

National Calamity Contingent Duty (NCCD)of excise @ of Rs.50 per metric tonne onindigenous crude oil and simultaneously anadditional duty of customs @ Rs.50 permetric tone on imported crude oil wasintroduced w.e.f. 1.3.2003. This duty was tobe valid for one year i.e. up to 29.2.2004 soas to replenish the national calamity contin-gent fund but has been retained for 2 yearsincreasing input costs of refineries andreducing overall refinery protection. It wasexpected that, the duty may be discontinuedeffective 1.3.2006. In the alternative, Cenvatcredit may be allowed against payment ofexcise duty on finished petroleum productsmanufactured from crude.

Withdrawal of end-used based exemptionsapplicable to Industrial Units

Petroleum products supplied for specific enduses are eligible for full exemption from dutye.g. Naphtha for fertilizer and LSHS forgeneration of electricity, products supplied foron-board consumption for Indian NavyVessels etc. Many of the customers eligible


for such exemption have no facility to lift theproduct directly from the refineries. Someproducts have to be moved to the customersonly through pipeline and there are somecustomers who have pipeline connectiononly with the Oil Marketing Terminals and notwith the refineries. When warehousingprovisions were available, the Oil MarketingTerminals could receive and store, non-dutyproducts, which could then be convenientlysupplied to these customers without paymentof duty. However, after withdrawal of thewarehousing facility for petroleum products,there are practical difficulties; oil marketingterminals can only receive duty paid productsfrom the refineries and in many cases directsupplies to the end use based exemptedcustomers cannot be effected from therefineries, due to logistic & infrastructuralproblems. It was expected that the Budgetwould simplify the process by issuing thenotification exempting the goods based onend-use be withdrawn instead the beneficia-ries be given duty subsidy by the Govern-ment.

Captive consumption benefit for LSHS/Fuel Oil etc used as Fuel Oil

Inputs procured from outside the refinery onpayment of duty, when used as fuel in therefinery, qualify for Cenvat credit notwith-standing that part of the finished product iscleared under exemption. However, therefineries are denied the benefit of suchCenvat credit on products manufacturedwithin the refinery and captively used as fuel.It was, therefore, expected that exemptionshould be provided to inputs manufactured inthe refinery and used captively as fuel withinthe same refinery for manufacture of finishedproducts which are cleared under exemption.

Classification of lubricating oils

An anomaly exists in the classification oflubricating oils under the Central Excise Act.This anomaly needs to be removed to availof the reduction for the goods under MRPbased assessment as per Notification No. 13/2002 - CE (NT) dated March 1, 2002 issuedunder Section 4A of the Central Excise Act,1944.

Service Tax

Exemption to services provided toOil & Gas exploration sector

Ambiguity exists on applicability of servicetax in view of particular wordings of therelevant definitions of ‘site formation andclearance, excavation and earth moving anddemolition services’. Difficulties are appre-hended at the field level, significant costs areincurred by the E&P Sector in carrying outthese activities and disputes between servicerecipients, service providers are significantlyincreasing and service costs to E&P compa-nies are growing. While Government’sintention not to burden the cost of Oil & GasE&P Projects with Customs, Excise and otherduties has been partially implemented byissuing appropriate exemption notificationsunder Customs and Excise laws, corre-sponding exemption notification, exemptingservices rendered to exploration andproduction activities from levy of service taxhas still not been made. It has been a longstanding request of Oil & Gas explorationindustry to extend the benefit of exemptionfrom service tax on services used in explora-tion and production activity.


Exempt payment of Service Tax on LPG(Domestic) and SKO (PDS) operations

As the oil marketing companies have beenincurring under-recoveries in the last fiscal,the problem has been compounded with theapplicability of service tax. Service Tax iscurrently leviable on the activities of LPG/SKO business viz. Packaging Services,transport of goods through pipeline, transportof LPG/SKO via Road and storage andwarehousing Charges. Keeping with thepolicy of nil taxation on subsidised products,it was suggested that the above activities areexempted from service tax.

Central Sales Tax

‘Declared Goods’ Status to Natural Gasunder the Central Sales Tax Act, 1956

Natural Gas and regassified LNG haveemerged as important sources of energy forvarious industries like power, fertilizers etc.Post introduction of VAT effective April 2005,natural gas has been classified underrevenue neutral rate of 12.5%. Some stateshave kept natural gas out of VAT and arelevying sales tax at the rate of 20%. In thecase, natural gas is transferred after pur-chase on inter-state basis, full tax credit is notavailable. Since natural gas is a key input,due to this high and multiple point sales taxstructure, the consumers are adverselyaffected particularly in the fertilizer andpower sectors. Suitable relief in sales tax willnot only ensure that cost of gas to the endconsumer is kept low but will also facilitatedevelopment of a National Gas Grid in thecountry. This provision stipulates that salestax on these declared goods cannot be morethan 4%. In order to provide a level playingfield amongst different primary energysources, natural gas including re-gasified

LNG should be declared as ‘goods of specialimportance in Inter-State trade or commerce’u/s 14 of the Central Sales Tax Act.

Reintroduction of irrecoverable taxescompensation’s scheme to cover underrecoveries of CST, octroi, entry tax etc.

Refineries as well as Oil Marketing Compa-nies selling petroleum products on interstatebasis to other Oil Companies are not able torecover Central Sales Tax for inter-statesales. This is because prices of petroleumproducts such as MS, HSD, SKO and LPGare fixed and hence CST cannot be passedon by Oil Marketing Companies to theconsumers of the consuming states. Thisresults in a huge under-recovery to stand-alone refineries as well as to composite oilcompanies. Even in the context of implemen-tation of Value Added Tax (VAT), there isuncertainty on abolition of CST on petroleumproducts, as major petroleum products arekept outside VAT.

Value Added Tax

Applicability of VAT to Petroleum products

Petroleum products have been excluded bymost of the States from levy of VAT, Sales taxand VAT rates are very high and vary basedon end use, further rates are also not uniformacross the States. This leads to high tax rateswhich are an impediment to orderly growthand input tax credits not granted. It hascreated ambiguous and non-uniform salestax regime which results in increasedtransaction costs. It was expected that Budgetwill provide roadmap for applicability ofclassical VAT across the value chain for allpetroleum products and will reduce the ratesof tax to a maximum of 20%, as per the VATScheme. This will allow real economic valueof fuels to be reflected in their prices.


Sixth Round of New ExplorationLicensing Policy (NELP VI)

Government of India (GoI) has invited offersfor 55 blocks comprising of 24 deepwater, 6shallow-water and 25 onland blocks cover-ing a sedimentary area of about 3.55 lakh sqkm under NELP VI on February 24, 2006.GoI has made changes to the terms of earlierNELP rounds, based on consultations withvarious stakeholders including E&P compa-nies and industry bodies, significant amongwhich are:

1. Blocks have been categorized on thebasis of geological perceptions and bidevaluation criteria customized accord-ingly

2. To discourage speculative bidding on thebasis of aggressive work programs, moreemphasis has been placed on the fiscalparameters

3. Weightage has been given to technicalcapability of designated operator onlyunlike that of consortia in earlier round.

4. The relinquishment norms have beensimplified and the exploration program isnow divided into two phases rather thanearlier three phases.

Section 5

Recent Significant Policy Changesand Initiatives for Oil & Gas Industry

Policy on Gas Pricing

Prior to 1987, gas prices were fixed byONGC/OIL. The price is being fixed byGovernment w.e.f. 30.1.1987. The price ofAPM gas of ONGC and OIL was last revisedeffective 1.7.2005. The salient features of therevised pricing order effective 1.7.2005 areas follows:

1. ONGC and OIL produced about 55MMSCMD APM gas from nominatedfields. The determination of producerprice for this gas will be referred to theTariff Commission. Till the Commissionsubmits its recommendation and adecision is taken thereon, the consumerprice of APM gas will be increased fromRs.2,850/MCM to a fixed price of Rs.3,200/MCM on adhoc basis.

2. It has been decided that all availableAPM gas would be supplied to only thepower and fertilizer sector consumersagainst their existing allocations alongwith the specific end users committedunder Court orders and small scaleconsumers having allocations upto 0.05MMSCMD at the revised price of Rs.3,200/MCM. This price is linked to acalorific value of 10,000 Kcal/cubic metre.


However, the gas price for transportsector (CNG), Agra-Ferozabad smallindustries and other small scale consum-ers having allocations upto 0.05MMSCMD would be progressivelyincreased over the next 3 to 5 years toreflect the market price.

3. The gas supplies through GAIL networkto non-APM consumers will be at theprice at which GAIL buys from JV produc-ers at landfall point, subject to a ceiling ofex-Dahej RLNG price of $US 3.86/mmbtufor the current year i.e. 2005-06. For theNorth-East region, Rs.3,200/MCM will beconsidered as the market price during2005-06.

4. The price of gas for the North-Easternregion will be pegged at 60% of therevised price for general consumers.Thus, the consumer price for the North-East region will increase from the existingprice of Rs.1,700 to Rs.1,920/MCM.

5. Subject to the determination of producerprice, based on the recommendations ofthe Tariff Commission, any additional gasas well as future production of gas fromnew fields to be developed in future byONGC/OIL will be sold at market-relatedprice in the context of NELP provisions.

Bio Diesel Purchase Policy

MoPNG, GoI has introduced Bio dieselpurchase policy on October 9, 2005. High-lights of Bio diesel purchase policy are:

1. With effect from January 1, 2006, thepublic sector oil marketing companiesshall purchase, through its select pur-chase centers, bio diesel (B100), whichmeet the fuel quality standard prescribedin the Bureau of Industrial standard (BIS)

specification formulated vide PCD3(2242) C-dated 26 July 2004, and as maybe notified and modified from time to time.The oil marketing companies shall makeavailable the comprehensive industryguideline “Operations, Quality and Safetymanual on Bio-Diesel – HSD B100 andHSD B05max” for information andguidance to bio-diesel industry.

2. The purchase centres have beenidentified in consultation with oil market-ing companies, viz. Indian Oil Corporation(IOC), Bharat Petroleum CorporationLimited (BPC) and Hindustan PetroleumCorporation Limited (HPC). On the basisof availability of minimum testing facilitiesfor B100 and for blending in HSD to theextent of five percent. Depending uponresponse, felt need, and preparedness intesting and accepting bio-diesel, morepurchase centres would be identifiedsubsequently.

3. The oil marketing companies shall buybio diesel (B100) which meets theprescribed BIS standard, at a uniformprice, as may be decided by the oilmarketing companies from time to time,depending upon marketing conditions.Such uniform price shall be inclusive ofany taxes and duties and transportationcost for delivery of bio diesel at purchasecentre. The uniform price once fixed shallbe in operation for six months, at the endof which it would be reviewed The initialpurchase price of bio diesel by the oilmarketing companies will be Rs 25 perlitre. The registered authorized bio-dieselmanufacturers shall be required todeliver B100 at the notified purchasecentres in calibrated tank trucks ofcapacity not less than 10 KL. In case thesuppliers envisage any deviation, theyshould inform the concerned oil companyand supply as per mutual convenience.


Rationalization of the policy onForeign Direct Investment

On January 24, 2006, GoI, with a view tofacilitating the easier inflow of FDI into India,has decided that instead of having to seekFIPB approval, FDI upto 100% would now beallowed under the automatic route for:

1. Laying of natural gas/LNG pipelines;

2. Market study and formulation andinvestment/financing in the petroleumsector.

The Union Cabinet has also raised the FDIcaps/ceiling to 100 per cent under theautomatic route in case of investment increation of infrastructure related to marketingin petroleum sector.

In the Pipeline

Petroleum and Natural Gas RegulatoryBoard Bill

The Government proposes to set up aPetroleum and Natural Gas RegulatoryBoard to regulate the refining, processing,storage, transportation, distribution, market-ing and sale of petroleum and petroleumproducts (excluding production of crude oiland Natural Gas). One of the basic objectivesof this Bill is to provide for a regulatorymechanism which would facilitate uninter-rupted and adequate supply of petroleum,natural gas and petroleum products in allparts of the country, including remote areas,at fair price, promote competitive marketsand access to monopolistic infrastructure inthe nature of common carrier on non-discriminatory basis by all entities. Provi-sions have been made in this Bill to ensureredressal of grievances and protection of

consumer interest. Once this bill is enacted,all downstream operations shall be regulatedby this statute.

Draft Policy for Development of GasPipelines Network

The Central Government has circulated aDraft Policy for Development of Gas Pipe-lines Network for public comments. The DraftPolicy aims at promoting investment in gaspipelines, providing inter-connectivitybetween regions, consumers & producersand for providing framework for future growthof the gas sector. The Government proposesto adopt the Draft Pipeline Policy for layingnatural gas pipelines in the interim perioduntil a statutory provision is made (throughenactment of the Petroleum and Natural GasRegulatory Board Bill).

Under the Draft Policy, all gas pipelinesexcept captive transmission gas pipelineslaid for exclusive use of a large consumerwill be built on the common carrier principleand their capacity will be expanded or anadditional pipeline will be laid if so desiredby the Regulator to meet the requirements ofnew players. The Draft Policy provides for theappointment of a Regulator for regulatingtransmission, distribution, supply and storagesystem for natural gas and LNG and topromote development of the sector. Some ofkey functions of the Regulator shall be:

– Authorize laying of network of pipelines,through which transportation of all gaswill be done.

– Oversee access to the gas pipeline onnon-discriminatory, common carrierprinciple with level playing field for allusers.

– Approve the ceiling tariff rates for gastransmission in all cases where gas is


transported on the common carrierprinciple and a tariff has not beenfinalized by the users with the owners ofthe pipeline.

– Approve tariff for the transmissionpipeline and/or for the distributionpipelines so as to provide a reasonablerate of return.

– Ensure grid connectivity by issuingappropriate directions for operations ofany pipeline network.

– Resolve issues relating to the operationof the pipeline on a nondiscriminatorybasis or the tariff of the pipeline.

To promote and develop the gas sector, theremay be a National Advisory Council consist-ing of stake holders of the gas grid system togive advice on such matters to the Govern-ment and the Regulator.

Other significant developments

Draft report on Integrated Energy Policy

Government, in order to meet the challengeof the country’s rising energy needs andproviding adequate energy of desired qualityin various forms to users in a sustainablemanner at reasonable costs, set up an expertcommittee under the Chairmanship of Dr. KiritS. Parikh to prepare an integrated energypolicy.

The draft report of the committee wasreleased on December 21, 2005 for seekingcomments from public.

Rangarajan Committee Report on Pricingand Taxation of Petroleum Products

The Government on 26th October 2005 hadset up a committee to look into the variousaspects of pricing and taxation of petroleumproducts with a view to stabilizing/rationaliz-ing their prices, keeping in view the financialposition of the oil companies, conservingpetroleum products, and establishing atransparent mechanism for autonomousadjustment of prices by the oil companies.

Committee has submitted its report toMoPNG on February 17, 2006. The recom-mendations made in the report can bedivided broadly into three groups.

1. The first set of recommendations relatingto pricing of petrol and diesel are follow-ing:

i) shift to a trade parity pricing formulato operate as an indicative ceilingprice for determining refinery gateas well as retail prices;

ii) Government to keep at arms lengthfrom price determination and toallow flexibility to oil companies tofix the retail price under the pro-posed formula; and

iii) reduce effective protection bylowering the customs duty on petroland diesel to 7.5%. This set ofrecommendations should beimplemented as an integratedpackage as selective implementa-tion will create more distortions.


2. The second set of recommendationsrelate to pricing of domestic LPG andPDS kerosene, viz:

(i) restrict subsidized kerosene toBelow Poverty Line (BPL) familiesonly;

(ii) raise the price of domestic LPG byRs. 75/cylinder;

(iii) discontinue the practice of askingONGC/GAIL/OIL to provide up-stream assistance, but insteadcollecting their contribution byraising the OIDB cess from thepresent level of Rs. 1,800/MT to Rs.4,800/MT; and

(iv) Government meeting the balancecost of subsidy from the budget. The‘PDS Kerosene and Domestic LPGScheme 2002’ will have to besuitably amended for this purpose.This set of recommendations shouldalso be implemented as an inte-grated package as partial imple-mentation will not yield sustainableresults.

3. The third set of recommendations relateto restructuring excise duties from thepresent mix of specific and ad-valorem toa pure specific levy and calibrating thelevies at Rs. 5.00/litre of diesel and Rs.14.75/litre of petrol.


Particulars Unit April to Dec 2005 April to Dec 2004 % Variation

Domestic Crude Production MMT 24.04 25.56 -5.90

Domestic Gas Production BCM 24.10 23.86 0.98

Refinery Production MMT 95.34 94.95 0.41

Refinery Capacity Utilisation Percent 99.40 98.90 0.51

Section 6

Commodity Balance of Petroleumand Petroleum Products

Source: MoPNG

As per MoPNG, domestic crude oil produc-tion in the period April - December 2005declined by 6 per cent when compared withthe corresponding period for 2004.

The domestic natural gas production rosefrom 23.86 MMT in April - December 2004 to24.10 MMT in 2005 for the correspondingperiod, thus registering a growth of 1 percent.

Refinery Production was marginally higher inApril - December 2005 as compared to thatin corresponding period of April - December

2005.


(Mill

ion

Tonn

es)


ACD Additional Customs DutyAED Additional Excise DutyAPM Administered Pricing MechanismASEAN Association of South-East Asian NationsBCM Billion Cubic MetreBED Basic Excise DutyC&F Cost and FreightCTA Customs Tariff Act, 1975DFRC Duty Free Replenishment CertificateECB External Commercial BorrowingEPCG Export Promotion Capital GoodsFBT Fringe Benefit TaxGDP Gross Domestic ProductGDR Global Depository ReceiptGoM Group of MinistersGST Goods and Services TaxGTL Gas to LiquidINR Indian RupeesJV Joint VentureLNG Liquefied Natural GasLPG Liquefied Petroleum GasLSHS Low Sulphur Heavy StockMAT Minimum Alternate TaxMMT Million TonneMMTPA Million Metric Tonne per AnnumMoPNG Ministry of Petroleum & Natural GasMRP Maximum Retail PriceMS Motor SpiritNCCD National Calamity Contingent DutyNCMP National Common Minimum ProgrammeNELP New Exploration Licensing PolicyNGL Natural Gas LiquidOIDA Oil Industry Development Act, 1974OVL ONGC Videsh Ltd.PDS Public Distribution SchemePSE Public Sector EnterprisesPOL Petroleum Oil & LubricantsSAED Special Additional Excise DutySED Special Excise DutySEZ Special Economic ZoneTRAI Telecom Regulatory Authority of IndiaUSD United States DollarVAT Value Added TaxWPI Wholesale Price Index

Abbreviations

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PricewaterhouseCoopers Pvt. Ltd. is one of the largest and most reputed professional services network in the country. PricewaterhouseCoopers specialists from the tax and advisory teams connect their thinking, experience and solutions to build public trust and enhance value for clients and their stakeholders.

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DELHIOil & Gas DeskSucheta Bhawan11-A, Vishnu Digamber MargNew Delhi 110 002Tel : +91 (11) 2321 6023Fax : +91 (11) 2321 0594 / 96Contact Person : N.N. GuptaEmail : [email protected]

PUNE401 Century Arcade,243-244, B/2 Narangi Baug Road,Off Boat Club Road,Pune 411 001Tel : +91 (20) 2612 3787/3271Fax : +91 (20) 2612 1131Contact Person : Sandip MukherjeeEmail :[email protected]

HYDERABAD6-3-550, 4th Floor, LB Bhavan,Somajiguda,Hyderabad 500 082Tel : +91 (40) 5566 6081/82Fax : +91 (40) 5566 6080Contact Person : Ashlesh VermaEmail : [email protected]

KOLKATAPlot No Y 14, Block EPSector V, Salt Lake Electronics ComplexBidhan NagarKolkata 700 091Tel : +91 (33) 2357 9100 Fax : +91 (33) 2357 3394Contact Person : Somnath BallavEmail : [email protected]

CHENNAIAuras Corporate Center,8th Floor98-A, Dr Radhakrishnan Salai,Mylapore, Chennai 600 004Tel : +91 (44) 4228 5000Fax : +91 (44) 4228 5100Contact Person : Natesan SivasubramanianEmail : [email protected]

MUMBAI252 Veer Savarkar Marg,3rd Floor,Shivaji Park, Dadar,Mumbai 400 028Tel: +91 (22) 5669 1500 Fax: +91 (22) 5654 7804Contact Person : Jairaj PurandareEmail : [email protected]

BANGALORE14th Floor “B” Wing,Mittal Tower,47/6, M.G. Road,Bangalore 560 001Tel : +91 (80) 2558 6362 Fax : +91 (80) 2558 6354Contact Person : Indraneel R. ChaudhuryEmail : [email protected]

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