The Hindu Business Line : RIL wants tax issues resolved on diesel sale

`A courtesy call': Mr Mukesh Ambani, Chairman of Reliance Industries Ltd, on his way to meet the Petroleum Secretary, Mr R.S. Pandey at Shastri Bhawan in New Delhi on Monday. - S. Subramanium

Our Bureau

New Delhi, Sept. 29 Any visit by Reliance Industries Ltd’s chief, Mr Mukesh D. Ambani, to the Capital’s corridors of power is bound to create a flutter. But this time speculation was high as the timing of the visit is on the eve of the crucial Court hearing on supply of gas from RIL’s prolific Krishna-Godavari asset, which is slated for hearing on September 30.

A day packed with meeting top officials of the Finance and Petroleum Ministries among others, Mr Ambani is understood to have discussed industry issues, including the grant of tax benefits for fuel sold from RIL’s Jamnagar refinery in the domestic market. While Mr Ambani remained non-committal on his meetings, Mr R.S. Pandey, Petroleum Secretary, termed it as a courtesy call.

The Government is seeking to become party to the case between the two Ambani brothers – Mukesh and Anil Ambani – as to get the injunction on sale of gas from D6 fields lifted. However, when asked whether the legal dispute was discussed, Mr Pandey said, “We did not discuss the case. He did not talk about it.”

D6 gas sale

The gas sales from RIL’s D6 Block depend on the outcome of the court case. Another issue that has emerged is whether NTPC’s gas contract with RIL was concluded or not. During an earlier hearing on the gas dispute between RIL and Anil Ambani’s RNRL, the Government counsel had stated in the Bombay High Court that the contract between RIL and NTPC had not been concluded. This led to a major controversy after which the Petroleum Ministry sought the counsel’s explanation.

Diesel sale

On the issue of asking RIL to sell diesel from its EoU refinery in the domestic market, the Petroleum Secretary said that RIL has offered to sell the fuel from its Jamnagar refinery to public sector oil marketing companies (OMCs) if the taxation issues are addressed. “They have offered to sell whatever quantity of diesel the OMCs need but want the taxation issue to be resolved. We are looking into it,” he said. The Petroleum Secretary said that the Ministry will at an appropriate time take up the issue with the relevant Ministries – Commerce and Finance.

Sourcing from RIL’s Jamnagar refinery would give the OMCs – Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation – the freight advantage provided the double taxation is removed. Taxes are to be paid by buyers making it unviable for the OMCs when compared to imports. It is also being considered if domestic sales by Reliance in the DTA (domestic tariff area) can be given a ‘deemed export status’ and continue to get income-tax waiver, which the company gets for selling LPG to the PSUs.