New Delhi: Oil Minister Jaipal Reddy on Friday asked Finance Minister Pranab Mukherjee to impose additional excise duty of Rs. 80,000 on diesel vehicles and grant 10- year tax holiday for oil and gas hunt and refineries in the forthcoming union budget.
According to sources, Reddy sought imposition of extra excise duty to alt39 discourage the dieselisation of the economyalt39 and bring additional revenues, which can go towards meeting the fuel subsidy.
Reddy met Mukherjee with a long- list of proposals concerning the oil and gas sector for consideration in Budget 2012- 13.
The oil ministry also demanded scrapping 5% customs or import duty on liquefied natural gas ( LNG) to reduce cost of imported fuel for core sectors of fertilizer and power plants. It argued that cleaner LNG should be treated at par with crude oil, which doesnalt39t attract any customs duty.
Also, it renewed its ageold demand for granting declared goods status to natural gas and LNG so that the environment friendly fuel attract a uniform sales tax of 5% instead of current system of varied taxes ranging from 12.5% ( Gujarat and Maharashtra) to 20% ( in Assam).
To buttress its claim, the ministry said like coal, which has been granted the declared goods status, gas is a preferred fuel for power generation with 40% of electricity being generated using the environmentfriendly fuel. Crude oil, petrol, diesel and ATF are now kept outside GST.