The government decided to extend the incentive package for setting up deep conversion refineries. For this purpose, govt has finalized a new policy to extend the incentive package for petroleum refining.
The package will provide a 20-year tax holiday and up to nine-year cascading customs duty reduction in pricing provided the investors sign construction agreements before Dec 31, 2021.
the policy framework has been finalized after consulting with the local refining industry. The new policy will be presented to the Economic Coordination Committee (ECC) of the cabinet for approval within a short time.
The new projects deep conversion oil refinery projects of a minimum of 1 lac barrels per day refining capacity to be set up anywhere in the country with the approval of govt latest by Dec 31, 2021, and will be eligible for 20-year income tax holiday from profits and gains from the date of commissioning.
The government will not guarantee product off-take and the refineries would be free to market their products through their own or other marketing companies or export after meeting local needs.
They would also be entitled to exemption from customs duty, withholding tax, or any other levy on import of any equipment to be installed, or material to be used in the refinery without certification by the Engineering Development Board (EDB). They would also avail exemption from general sales tax, or any other ad valorem tax on the import of equipment to be installed or materials to be used in the refinery prior to commissioning.