Finance ministry says reports on new tax proposals "baseless"

[K.Karthik Raja]

Finance ministry says reports on new tax proposals "baseless"
Wednesday, May 28
.
NEW DELHI - Finance ministry today said reports about government
planning
to impose a new tax to bail out state-owned oil marketing companies
are
"totally baseless".
"Ministry of Finance notes, with regret, that a section of the
media has
carried reports that are largely speculative, following a routine
meeting
between Minister for Petroleum and Natural Gas and the Finance
Minister. In
particular, reports about certain new tax proposals are totally
baseless,"
the ministry said in a statement.
Tuesday, petroleum ministry had said it had proposed a surcharge
on
income tax as part of a bailout package for oil companies.
"A proposal of levying a cess has been discussed along with bonds,
duty
rationalisation and price hike...the finance ministry needs some
revenue
source to give something to the oil companies," Petroleum and Natural
Gas
Additional Secretary S. Sundareshan had said after the meeting between
oil
minister Murli Deora and Finance Minister P. Chidambaram.
Deora also had confirmed that there was a proposal to impose a
cess, but
said no decision had been taken on that.
With crude prices topping $135 a barrel mark, the gross revenue
loss of
the oil marketing companies is likely to cross 2 trln rupees for the
current
financial year as against 773 bln rupees in 2007-08.
Currently, oil marketing companies are incurring a revenue loss of
16.34
rupees per L on petrol, 23.5 rupees per L on diesel, 29 rupees per L
on
kerosene and 316 rupees per cylinder on cooking gas. End
.