House panel wants declared goods, infra status for LNG

Written by Sanjay Jog | Mumbai | Updated: Dec 30 2008, 06:07am hrs
The parliamentary committee on petroleum and natural gas has reiterated that the status of declared goods and infrastructure be granted to natural gas/LNG projects and import duty/customs duty on LNG/capital goods for LNG be brought down to nil. The committee in its report submitted during the just concluded winter session of the parliament observed that these sops would give the much needed fillip to the LNG sector.

The committee recalled its recommendation that the centre should constitute a Gas Advisory Board as stipulated under the Gas Pipeline Policy. The petroleum ministry informed the committee that Board would be considered after the Petroleum and Natural Gas Regulatory Board (PNGRB) starts functioning.

The Committee is unhappy to note that the Gas Advisory Board has not yet been set up even though the PNGRB has been in operation for over a year. Since the mandate of the Board is of paramount importanceto give advice to the Central government on the various aspects of promotion and developing gas pipeline network and city/local gas distribution networks in the country, the Committee desire that the gas advisory board be put in place without any further delay.

The ministry submitted that the matter was taken up with the finance ministry for (i) declared goods status to Natural Gas under the Central Sales Tax Act, 1956, (ii) Zero percent duty on import of LNG instead of 5%, (iii) Zero percent custom duty on capital goods for LNG, and (iv) Infrastructure status for LNG projects under Income Tax Act, 1961.

Further, as required by the ministry of finance, additional information was also furnished. However, the same could not be included in the budget.

The committee noted that the power ministry has also moved more or less similar proposals and thus it should be taken up again with the finance ministry.